Originally Posted By: gromicko
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(May 4, 2004) – The U.S. Senate has passed legislation to extend for four years the ban on state taxation of Internet access. The moratorium had expired in 2003.
In addition, the legislation permits states that currently tax DSL lines to continue to do so for two more years, and states that had Internet access taxes in place in 1998 can keep them in place for three more years. The legislation also clarifies the treatment of voice over Internet protocol (VOIP) telephone service by stating that states may tax voice Internet transmission in the same manner as they tax land line telephone calls.
Cable services remain tax-free. The legislation passed on a rare bipartisan vote of 93 to 3. It now goes to conference with the U.S. House of Representatives-passed bill, which made the moratorium permanent, eliminated grandfather protection for existing state taxes on access, and provided no clarification of VOIP delivery taxation.