Senate Finally Backs Internet Tax Ban

WASHINGTON – After laboring over the issue of Internet taxation since November 2003, the U.S. Senate voted 93 to 3 to give the ban on taxing high-speed, wireless and dial-up services another four years.

The temporary extension was presented as a salvo by senators who felt that a permanent moratorium on online telecommunications services would unduly harm state and local governments and deprive them of badly needed revenue.

The decision is considered a compromise and is expected to spur the rollout of high-speed and wireless services.

The original ban, which was passed in 1998 as the Internet Tax Freedom Act, occurred before the advent of high-speed access and only applied to dial-up services. Prior to this week's decision, high-speed access was subject to taxation, although service providers are now expected to phase out that taxation process over the next two years, taking a projected loss of $100 million.

The bill that passed through the Senate yesterday was an amended version of the former, and managed to strike middle ground in the fierce debate among lawmakers.

"The bottom line is, the Senate passed a bill that will end technological discrimination and save consumers millions of dollars," said Ron Wyden (D-Ore.), one of the authors of the original bill, which asked lawmakers to approve a permanent ban on Internet taxation.

The Senate vote also ended the controversial debate over the 10 states that had been exempt from the 1998 tax ban, which enabled them to tax both dial-up and high-speed access. Lawmakers in favor of keeping those states exempt were concerned that revenue losses would tally into the billions of dollars. According to the Senate's vote, those states will remain exempt from the four-year ban.

Those states include Hawaii, New Hampshire, New Mexico, North Dakota, Ohio, South Dakota, Tennessee, Texas, Washington and Wisconsin.

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

FSC Updates Complaint in Tennessee AV Case, AG Motions to Dismiss

The Free Speech Coalition this week filed an amended complaint in its lawsuit challenging the Protect Tennessee Minors Act as unconstitutional, in response to which the Tennessee attorney general motioned for dismissal of the case.

Cherie DeVille Joins Woodhull Freedom Foundation 'Free Speech' Panel

Multi-XMAs winner Cherie DeVille will join the upcoming Woodhull Freedom Foundation panel series "Fact Checked by Woodhull," addressing free speech on Feb. 26.

Wisconsin AV Bill Moves Ahead, Minus Anti-VPN Provisions

The Wisconsin state Senate on Wednesday advanced a bill that would require adult websites to verify the ages of users, but approved an amendment striking proposed language that would have required sites to block virtual private network traffic.

Pineapple Support Introduces 'Wellbeing by PS' Service

Pineapple Support has debuted its new Wellbeing by PS service, providing mental health support packages for companies and agencies.

MyMember.site Integrates Bluesky Functionality

MyMember.site has added Bluesky features to its website management platform.

GirlsDoPorn Defendants Ordered to Pay Victims $75.5 Million

A federal court has ordered former GirlsDoPorn owner Michael Pratt and his co-defendants in the GDP sex trafficking case to pay restitution totaling $75,568,283.47 to 106 victims.

SWR Data Publishes 'Clip Trend' Report

Adult industry market research firm SWR Data has published a report on clip platform performance and sales.

Another German Court Rejects Blocking Orders Against Pornhub, YouPorn

A German court has blocked the Rhineland-Palatinate Media Authority (MA RLP) from forcing telecom providers based within the court’s jurisdiction to cut off access to Aylo-owned adult sites Pornhub and YouPorn.

Ofcom Fines Kick Online Entertainment $1 Million for AV Noncompliance

U.K. media regulator Ofcom on Thursday fined Kick Online Entertainment 800,000 pounds (more than $1 million) for failing to implement age checks as required for compliance with the Online Safety Act.

FSC Details Legislative Outlook for 2026

The Free Speech Coalition (FSC) has laid out the legislative outlook for the industry in 2026.

Show More