On December 3, 2004, President Bush signed S. 150, the "Internet Tax Nondiscrimination Act" into law.
This bill was originally introduced in the Senate on January 13, 2003. On April 29, 2004, the Senate passed the bill by a 93-3 vote. The bill was then held in the Senate until November 17, 2004, when the Senate amended the bill to provide that municipalities can continue to collect taxes on telephone services, even those made over the internet. The House passed the compromise version on November 19, 2004 by voice vote.
The legislation extends the moratorium on taxes on Internet access and multiple and discriminatory taxes on electronic commerce imposed by the Internet Tax Freedom Act for four more years (retroactive to November 1, 2003, when the original moratorium expired). It also includes a grandfather clause for existing state access taxes, some protection of voice-over Internet protocol, a two-year grandfather clause for existing state access taxes on DSL and a new definition of "Internet access" that covers all types of high-speed Internet services offered over DSL or other future telecommunications services. Lastly, the bill directs the Comptroller General to study, and report to specified congressional committees on, the impact of the Internet tax moratorium and on the deployment and adoption of broadband technologies for Internet access throughout the United States.123
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