• by Paul Gough , November 21, 2003

Update on the possible extension of the ban on Internet access taxes: It hasn't happened yet.

Despite bipartisan support in the Senate and passage of a similar bill in the House of Representatives, the Senate can't seem to lock into a deal giving the Internet a continued tax break. Dow Jones News Service reported today that the Senate leadership is looking to break the logjam by proposing a nine-month extension.

In other words, the Senate is flinching.

It's not like they have a lot of time. The five-year-old ban ran out Nov. 1, which gives state and local legislators an opening to pass taxes on Internet connections when they resume work in January. The Senate's going to go home soon, too, and there's no telling when they'll get a chance to consider it again.

Much of the opposition comes from state and local governments, which see fertile new ground for taxation in Internet connections. And it doesn't answer the question about state sales taxes on Internet purchases. One of the strongest supporters of a permanent ban is Sen. Ron Wyden, D-Ore., who wants to extend the ban to include wireless and DSL.

Wyden told Dow Jones News Service that a shorter extension "means the states can go out and start taxing e-mail or any Internet service delivered by wireless or DSL."

-- Paul J. Gough