Despite Political Obstructionism, Senate Extends Internet Tax Moratorium

At last, the principle of lower taxes and less government prevailed in preserving the economic engine of tomorrow over revenue-hungry state governors and Congress’ "Internet Tax Man."

After several attempts by Senator Byron Dorgan (D-ND) and Mike Enzi (R-WY) to derail the measure, the U.S. Senate last night passed on a voice vote a "clean," two-year extension of the Internet tax moratorium, rejecting an amendment that would have led to new and excessive taxation by the states on Internet access and electronic commerce.

The bill, H.R. 1552, passed by the House of Representatives last month, now moves to the president’s desk for his signature. President Bush has indicated he will sign the new measure into law.

Senator George Allen (R-VA), who worked tirelessly in the Senate to overcome the obstacles of those who view the Internet as a tax haven, said, "I am going to stand on the side of freedom, freedom of the Internet, trusting individuals and entrepreneurs, not on the side of making this advancement in technology easier to tax for the tax collectors."

Representative Christopher Cox (R-CA), who sponsored the extension legislation in the House, said, "This is wonderful news. …The bottom line is that consumers know that for the next two years, the Internet will not be singled out for unfair tax treatment."

The moratorium on Internet-specific taxes expired on October 21 because a handful of Senators, led by Dorgan, had refused to allow a vote on the measure without tying it to the completely separate and controversial issue of allowing the states to enter into a multi-state sales tax compact to force out-of-state businesses to collect and remit states’ sales and use taxes. Absent such a provision, Senator Dorgan was willing, and worked very hard, to prevent an extension of the moratorium from passing, thus subjecting the Internet to an abundance of new taxes that would have stifled future growth in e-commerce.

The Center for Individual Freedom — among the most vocal supporters of the moratorium -- exposed Dorgan’s attempts to disrupt extension and ran ads in both the Washington Times and Bismarck Tribune labeling him the "Internet Tax Man."

The Center for Individual Freedom commends those in the Senate who voted against the obstructionist efforts of Dorgan and Enzi, and preserved the prospect for future growth in this important sector of the U.S. economy.

To view the ad labeling Senator Dorgan the "Internet Tax Man," click here.

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