Three U.S. senators have introduced a bill to permanently extend a ban on taxes unique to the Internet, such as access taxes. Democrat Ron Wyden of Oregon, Republican John McCain of Arizona and Republican John Sununu of New Hampshire introduced the Permanent Internet Tax Freedom Act Thursday, the first day of business for the new U.S. Congress. The bill, in addition to permanently banning taxes on Internet access, would prohibit states from taxing online purchases if they don't also tax catalog or phone-based sales.
If Congress does not extend the ban, consumers could face significant increases in the cost of Internet service, Wyden said in a statement. "Why should a product that's not taxed on the street or taxed in a store be taxed on the Internet?" Wyden said. "It's unfair, anticompetitive and would greatly harm one of the booming sectors of our economy." Congress first passed a temporary ban on taxes that target the Internet in 1998, and has extended the ban twice. The current moratorium expires in November.