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 © 2025 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

Industry Photog, 'Payout' Founder Mike B Passes Away

Longtime industry photographer and publisher Michael Bartholomey, known widely as Mike B, passed away Saturday.

FSC Announces 2025 Board of Directors Election Nominees

The Free Speech Coalition (FSC) has announced the nominees for its 2025 Board of Directors election.

AdultHTML Launches Black Friday Web Design, Development Promo

AdultHTML has launched its annual Black Friday/Cyber Monday promo for web design and development, running through Dec. 5.

Canada Exempts Online Adult Content From 'CanCon' Quotas

The Canadian Radio-television and Telecommunications Commission (CRTC) has updated its broadcasting regulatory policies, exempting streaming adult content from “made in Canada” requirements that apply to other online material.

Creator Law Firm 'OnlyFirm' Launches

Entertainment attorney Alex Lonstein has officially launched OnlyFirm.com for creators.

German Court Puts Pornhub, YouPorn 'Network Ban' on Hold

The Administrative Court of Düsseldorf has temporarily blocked the State Media Authority of North Rhine-Westphalia (LfM) from forcing telecom providers to cut off access to Aylo-owned adult sites Pornhub and YouPorn.

FSC: NC Law Invalidating Model Contracts Takes Effect December 1

The Free Speech Coalition (FSC) announced today that North Carolina's Prevent Exploitation of Women and Minors Act goes into effect on December 1.The announcement follows:

NYC Adult Businesses Seek SCOTUS Appeal in Zoning Case

Attorneys representing a group of New York City adult businesses are asking the U.S. Supreme Court to hear an appeal of a lower court’s decision allowing enforcement of a 2001 zoning law aimed at forcing adult retail stores out of most parts of New York City.

Ofcom Investigates More Sites in Wake of AV Traffic Shifts

U.K. media regulator Ofcom has launched investigations into 20 more adult sites as part of its age assurance enforcement program under the Online Safety Act.

MintStars Launches Debit Card for Creators

MintStars has launched its MintStars Creator Card, powered by Payy.

Show More