U.S. Senate Moves to Ban Net Taxes

WASHINGTON – The U.S. Senate is once again mulling the issue of Internet taxation, only this time, President Bush is weighing in loud and clear that the 1998 moratorium on state and local taxes for Internet connections should stand.

"We must not tax broadband access," Bush said in a campaign speech. "If you want broadband access throughout the society, Congress must ban taxes on access."

Bush also vowed to make high-speed Internet access available to every U.S. home within three years.

On Monday, the Senate voted 74-11 in favor of enforcing the moratorium, and forced the vote onto the Senate floor where it will be subject to various amendments.

The Internet taxation issue became a sore point for the House and Senate last November when the Internet Tax Freedom Act (ITFA) of 1998 expired. Lawmakers bought chunks of time incrementally until finally deciding to revisit the issue sometime in 2004.

ITFA was written long before high-speed access ever existed, which has been an underlying crutch in the decision-making process for lawmakers, some of whom are eager to see the ban continued because it will effectively encourage the deployment of high-speed Internet service, while others are wary that the loss in revenue for state and local governments could be substantial.

Bush and certain lawmakers are also calling for a phase out of a grandfather clause in ITFA that exempts 10 states from the moratorium and allows them to tax telecommunications services in a way that other states cannot. By phasing out the clause, those states, which include Hawaii, New Hampshire, New Mexico, North Dakota, Ohio, South Dakota, Tennessee, Texas, Washington, and Wisconsin, would face a considerable loss of revenue.

A study released last fall by the Congressional Budget Office estimates that repealing the grandfather clause would result in $9 billion in lost revenue for those states alone.

The bill was scribed by Sen. George Allen (R-Va.) and is co-sponsored by Sen. Ron Wyden (D-Ore.). Additional senators have come up with a bill that only enforces the ban for another two years.

Allen's proposed bill would make it illegal for state and local governments to initiate new taxes on Internet access and would require any existing taxes to be phased out in three years.

"Now, the Senate has the opportunity to make sure that access to the Internet remains tax free and is thereby as accessible as possible to all people, in all parts of the country," Allen said.

Copyright © 2026 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

AEBN Reveals Ariel Demure as Top Trans Star for Q3 of 2026

AEBN has named its top trans stars for the third quarter of 2026, with Ariel Demure landing atop the leaderboard.

Porn Piracy: How AI Is Transforming Content Theft and Protection

Gone are the days when the word “pirate” primarily conjured images of clever scoundrels like Captain Jack Sparrow, swaggering across the high seas in search of gold and jewels. Today’s most prolific pirates operate in the darkest corners of the internet, armed with bots, scrapers and generative AI.

Playhaus Network Launches Podcast Platform Through PAYSITE

Entertainment website The Playhaus Network is launching its new podcast platform through PAYSITE.

Sportsheets Wins Trademark Infringement Case Against Copycat Website

The World Intellectual Property Organization (WIPO) has ruled in favor of adult brand Sportsheets in a case against a copycat website using an infringing domain.

Kylie Rocket, Derek Kage Cap AEBN's Top Stars for 3rd Quarter of 2026

AEBN has revealed its most popular performers in straight and gay theaters for the third quarter of 2026.

JustFor.fans Launches Android Version of 'JFF Create' Mobile App

JustFor.fans (JFF) has rolled out an Android-compatible version of its creator management mobile app, JFF Create.

Kink.com Wins Trademark Infringement Case Against Copycat Website

The World Intellectual Property Organization (WIPO) has ruled in favor of Kink.com in a case against a copycat website using an infringing domain.

On-Chain JAV Distribution Platform 'HandSome' Goes Live With Open Beta

Fukuoka tech firm Fidem has officially rolled out an open beta version of HandSome, a new Japanese Adult Video (JAV) content distribution platform built on blockchain technology.

Arcom Investigates MYM Over SREN Compliance

French media regulator Arcom is investigating creator platform MYM to determine whether the site may have violated age assurance rules and/or other requirements of France’s Security and Regulation of the Digital Space (SREN) law.

England, Wales to Enforce 'Extreme' Content Laws Starting Nov. 6

England and Wales will begin enforcing new laws criminalizing depictions of “non-fatal strangulation,” as well as sexual content in which adults portray underage characters, starting Nov. 6, the U.K. Ministry of Justice announced Friday.

Show More