Congress gives final OK to banning local Internet taxes

WASHINGTON >> Congress voted Thursday to permanently bar state and local governments from taxing access to the Internet, as lawmakers leapt at an election-year chance to demonstrate their opposition to imposing levies on online service.

On a vote of 75-20, the Senate gave final congressional approval to the wideranging bill, which would also revamp trade laws. The White House said President Barack Obama will sign it.

“The Internet is a resource used daily by Americans of all ages,” said Senate Majority Leader Mitch McConnell, R-Ky., who brokered an agreement with a Democratic leader earlier this week that helped clear the way for passage. “It’s important that they be able to do all of this without the worry of their Internet access being taxed.”

The ban on local Internet access taxes had broad support. Even so, some lawmakers remained unhappy over its trade provisions and because the measure omitted a separate, more controversial proposal to let states force online retailers to collect sales taxes for their transactions.

Senate Minority Leader Harry Reid, D-Nev., said the bill was full of “missed opportunities and half-measures.”

Since 1998 in the Internet’s early days, Congress has passed a series of bills temporarily prohibiting state and local governments from imposing the types of monthly levies for online access that are common for telephone service. Such legislation has been inspired by a popular sentiment that the Internet should be free, along with Republican opposition to most tax proposals.

Until now, states that imposed Internet access taxes have been allowed to continue. Under the approved bill, those states would have to phase out their taxes by the summer of 2020.

Seven states — Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Texas and Wisconsin — have been collecting a combined $563 million yearly from Internet access taxes, according to information gathered by the nonpartisan Congressional Research Service.

Forty-nine Republican and 26 Democratic senators backed the legislation Thursday while 17 Democrats and three Republicans voted “no.”

The House approved the compromise in December with the backing of nearly all Republicans but just 24 Democrats.