House Passes Four-Year Extension of Internet Tax Ban
The House voted overwhelmingly Tuesday for a bill (HR- 3678) to extend the Internet tax moratorium four years. The bill heads to the Senate. Industry lauded the 405-2 vote, which came despite a Republican-led effort to force a vote on a permanent ban. House leaders foiled demands for a permanent vote by placing the bill under suspension of the rules. That bars amendments, limits debate and requires a two-thirds vote for passage. Had the bill not passed, it would have gone to the Rules Committee and then back to the House floor. The Senate doesn’t have that option.
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“It is critical that the Senate now act on this bipartisan legislation ahead of the Internet access tax moratorium’s expiration on November 1,” House Speaker Nancy Pelosi, D-Calif., said after the bill’s passage. Republicans’ wish for an on-the-record vote on a permanent ban was thwarted by industry support of the temporary extension. In a letter sent Tuesday before the vote, the NCTA urged Pelosi to get the temporary ban passed, the latest in a number of industry groups to urge such action.
“Leadership has shown they want to leave the door open for taxes,” said Rep. Lamar Smith, R-Tex., ranking member of the House Judiciary Committee. Smith argued vehemently for a vote on a permanent ban, saying most House members had co- sponsored bills seeking a permanent ban. “We want to broaden broadband” usage and a permanent ban “really speaks to that,” Rep. Anna Eshoo, D-Calif., one of two members to vote against the temporary extension, said in a speech before the vote. She authored a permanent ban bill (HR-743) that has 238 co- sponsors.
Many Democrats voted for the temporary ban as a matter of expediency, since the existing ban expires Nov. 1, leaving little time to haggle. “Although I strongly favor a permanent moratorium, no permanent bill will make it through the Senate,” said California Democrat Rep. Zoe Lofgren, who co-sponsored HR-743. “We need to act now… and stop dithering,” Lofgren said. “It is imperative that Congress not allow the Internet tax moratorium to expire,” said USTelecom President Walter McCormick.
Senate Republicans see bipartisan support for a permanent ban in their chamber, they said. They urged approval at a briefing Tuesday before the House passed its measure. “There is time to conference the bills,” said Sen. John Sununu, R-N.H. “It’s ridiculous to think that the House and Senate can’t work our differences in legislation. All it takes is for people to come to the table… What should be driving the vote is what is right for consumers.”
“Consumers are the ones most outraged by this,” said Sen. Trent Lott, R-Miss. Industry lobbying to support a permanent ban hasn’t influenced him, he said. “If there’s been a big lobbying effort, it’s missed me,” Lott said. On the contrary, the Internet industry and telecom providers quietly gave up efforts in recent weeks to push a permanent ban as expiration neared and partisanship polarized debate.
“While NCTA’s preference has been for a permanent extension of the current moratorium, our foremost goal is to ensure that the moratorium does not lapse on November 1,” President Kyle McSlarrow said. HR-3678 proposes important definitional and substantive changes in the moratorium, protecting consumers and businesses from new and burdensome taxes on Internet services, McSlarrow said. The Business Software Alliance also wrote Pelosi Tuesday endorsing the bill, though it would prefer a permanent ban. The bigger danger is letting the ban expire, the group said.
The Don’t Tax Our Web Coalition urged the Senate Commerce Committee to take up its bill so the full Senate can act “before it’s too late,” Chairman Broderick Johnson said Tuesday. The industry group believes a permanent ban is the ideal choice, it said, endorsing the temporary ban legislation as an alternative to no action. The National Association of Manufacturers praised the House action Tuesday, saying if the ban expires it would cause “more than 7,000 tax jurisdictions to have authority to tax Internet access.” Verizon, TIA and CTIA also praised the House for passing the bill.