S. Amdt. 3466 - To Amend the Internet Tax Freedom Act to Extend the Moratorium on Certain Taxes Relating to the Internet and to Electronic Commerce.

To Amend the Internet Tax Freedom Act to Extend the Moratorium on Certain Taxes Relating to the Internet and Electronic Commerce

H.R. 3678 — 110^th Congress (2007–2008)

Summary

This bill amends the Tax Freedom Act of 1998 by extending the internet tax moratorium until 2011. There is strong, varied support for a permanent ban, but state and local governments are resistant, as their budgets could benefit greatly from potential taxes. There is also an argument that it is unfair to businesses that don't sell on the internet, for they have to pay sales taxes that their internet competitors do not. (by CRS)

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Title

To amend the Internet Tax Freedom Act to extend the moratorium on certain taxes relating to the Internet and to electronic commerce.

Other Titles

• Internet Tax Freedom Act Amendments Act of 2007
• Internet Tax Freedom Act Amendments Act of 2007
• Internet Tax Freedom Act Amendments Act of 2007
• Internet Tax Freedom Act Amendments Act of 2007
• Internet Tax Freedom Act Amendments Act of 2007

Sponsor

John Conyers

Co-Sponsors

• Christopher Cannon
• Melvin Watt
• Darrell Issa
• F. Sensenbrenner
• Linda Sánchez
• Frederick Boucher

Subjects

• Taxation
• Actions and defenses
• Business
• Electronic commerce
• Electronic mail systems
• Internet
• Law
• Local taxation
• State and local government
• State laws
• State taxation
• Tax exemption
• Technology
• Telecommunication

Related Bills

• S. 1453 (110^th) : ITFA Extension Act of 2007
• S. 2128 (110^th) : Permanent Internet Tax Freedom Act of 2007

Major Actions

Introduced	9/27/2007
Referred to Committee
Amendments (1 proposed)
Passed House	10/16/2007
Passed Senate	10/25/2007
Signed by President	10/31/2007

Bill History

• All Votes
• All Actions
• Amendments

	Chamber/Committee	Motion	Date	Result
select this vote	House	On Passage - House - H.R. 3678 Internet Tax Freedom Act Amendments Act of 2007 - Under Suspension of the Rules	10/16/2007	This bill PASSED the House 405 voted YES 2 voted NO 25 voted present/not voting
select this vote	Senate	Passed Senate with an amendment by Unanimous Consent.	10/25/2007	PASSED by voice vote
currently selected	Senate	Amendment SA 3466 agreed to in Senate by Unanimous Consent.	10/25/2007	PASSED by voice vote
select this vote	House	Suspend the Rules and Agree to the Senate Amendment: H.R. 3678 Internet Tax Freedom Act Amendments Act of 2007	10/30/2007	This motion PASSED the House 402 voted YES 0 voted NO 30 voted present/not voting

	Action	Date	Description
	Introduced	9/27/2007
		9/27/2007	Sponsor introductory remarks on measure. (CR E2001)
		9/27/2007	Referred to the House Committee on the Judiciary.
		10/10/2007	Committee Consideration and Mark-up Session Held.
	Put on a legislative calendar	10/10/2007	Ordered to be Reported (Amended) by the Yeas and Nays: 38 - 0.
		10/13/2007	Reported (Amended) by the Committee on Judiciary. H. Rept. 110-372.
	Put on a legislative calendar	10/13/2007	Placed on the Union Calendar, Calendar No. 230.
		10/16/2007	Considered as unfinished business.
select this vote	House Vote on Passage	10/16/2007	On Passage - House - H.R. 3678 Internet Tax Freedom Act Amendments Act of 2007 - Under Suspension of the Rules
		10/17/2007	Mr. Watt moved to suspend the rules and pass the bill, as amended.
		10/17/2007	Considered under suspension of the rules.
		10/17/2007	DEBATE - The House proceeded with forty minutes of debate on H.R. 3678.
		10/17/2007	At the conclusion of debate, the Yeas and Nays were demanded and ordered. Pursuant to the provisions of clause 8, rule XX, the Chair announced that further proceedings on the motion would be postponed.
		10/17/2007	Received in the Senate. Read the first time. Placed on Senate Legislative Calendar under Read the First Time.
	Put on a legislative calendar	10/18/2007	Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 429.
		10/25/2007	Measure laid before Senate by unanimous consent.
select this vote	Senate Vote on Passage	10/25/2007	Passed Senate with an amendment by Unanimous Consent.
		10/25/2007	Amendment SA 3466 proposed by Senator Reid for Senator Sununu.
currently selected	Vote	10/25/2007	Amendment SA 3466 agreed to in Senate by Unanimous Consent.
		10/26/2007	Message on Senate action sent to the House.
	Presented to President	10/30/2007	Cleared for White House.
	Presented to President	10/30/2007	Presented to President.
		10/30/2007	Ms. Sanchez, Linda T. moved that the House suspend the rules agree to the Senate amendment.
		10/30/2007	DEBATE - The House proceeded with forty minutes of debate on the motion to suspend the rules and agree to the Senate amendment to H.R. 3678.
		10/30/2007	At the conclusion of debate, the Yeas and Nays were demanded and ordered. Pursuant to the provisions of clause 8, rule XX, the chair announced that further proceedings on the motion would be postponed.
		10/30/2007	On motion that the House suspend the rules and agree to the Senate amendment Agreed to by the Yeas and Nays (2/3 required): 402 - 0 (Roll No. 1014).
select this vote	Vote	10/30/2007	Suspend the Rules and Agree to the Senate Amendment: H.R. 3678 Internet Tax Freedom Act Amendments Act of 2007
	Signed	10/31/2007	Signed by President.
	Enacted	10/31/2007	Became Public Law No: 110-108.

	Number	Sponsor	Date Offered	Status
currently selected	S. Amdt. 3466	Sununu, John [R-NH]	October 25, 2007	Passed by voice vote on October 25, 2007.
	To amend the Internet Tax Freedom Act to extend the moratorium on certain taxes relating to the Internet and to electronic commerce. Actions October 25, 2007, 12:00 am ET - Amendment SA 3466 proposed by Senator Reid for Senator Sununu. October 25, 2007, 12:00 am ET - Amendment SA 3466 agreed to in Senate by Unanimous Consent. Full Text of this Amendment SA 3466. Mr. REID (for Mr. Sununu (for himself, Mr. Carper, Mr. Stevens, Mr. Inouye, Mr. McCain, Mr. McConnell, Mr. Alexander, Mrs. Hutchison, and Mr. Brownback)) proposed an amendment to the bill H.R. 3678, to amend the Internet Tax Freedom Act to extend the moratorium on certain taxes relating to the Internet and to electronic commerce; as follows: Strike all after the enacting clause and insert the following: SECTION 1. SHORT TITLE. This Act may be cited as the ``Internet Tax Freedom Act Amendments Act of 2007''. SEC. 2. MORATORIUM. The Internet Tax Freedom Act (47 U.S.C. 151 note) is amended-- (1) in section 1101(a) by striking ``2007'' and inserting ``2014'', and (2) in section 1104(a)(2)(A) by striking ``2007'' and inserting ``2014''. SEC. 3. GRANDFATHERING OF STATES THAT TAX INTERNET ACCESS. Section 1104 of the Internet Tax Freedom Act (47 U.S.C. 151 note) is amended by adding at the end the following: ``(c) Application of Definition.-- ``(1) IN GENERAL.--Effective as of November 1, 2003-- ``(A) for purposes of subsection (a), the term `Internet access' shall have the meaning given such term by section 1104(5) of this Act, as enacted on October 21, 1998; and ``(B) for purposes of subsection (b), the term `Internet access' shall have the meaning given such term by section 1104(5) of this Act as enacted on October 21, 1998, and amended by section 2(c) of the Internet Tax Nondiscrimination Act (Public Law 108-435). ``(2) EXCEPTIONS.--Paragraph (1) shall not apply until June 30, 2008, to a tax on Internet access that is-- ``(A) generally imposed and actually enforced on telecommunications service purchased, used, or sold by a provider of Internet access, but only if the appropriate administrative agency of a State or political subdivision thereof issued a public ruling prior to July 1, 2007, that applied such tax to such service in a manner that is inconsistent with paragraph (1); or ``(B) the subject of litigation instituted in a judicial court of competent jurisdiction prior to July 1, 2007, in which a State or political subdivision is seeking to enforce, in a manner that is inconsistent with paragraph (1), such tax on telecommunications service purchased, used, or sold by a provider of Internet access. ``(3) NO INFERENCE.--No inference of legislative construction shall be drawn from this subsection or the amendments to section 1105(5) made by the Internet Tax Freedom Act Amendments Act of 2007 for any period prior to June 30, 2008, with respect to any tax subject to the exceptions described in subparagraphs (A) and (B) of paragraph (2).''. SEC. 4. DEFINITIONS. Section 1105 of the Internet Tax Freedom Act (47 U.S.C. 151 note) is amended-- (1) in paragraph (1) by striking ``services'', (2) by amending paragraph (5) to read as follows: ``(5) INTERNET ACCESS.--The term `Internet access'-- ``(A) means a service that enables users to connect to the Internet to access content, information, or other services offered over the Internet; ``(B) includes the purchase, use or sale of telecommunications by a provider of a service described in subparagraph (A) to the extent such telecommunications are purchased, used or sold-- ``(i) to provide such service; or ``(ii) to otherwise enable users to access content, information or other services offered over the Internet; ``(C) includes services that are incidental to the provision of the service described in subparagraph (A) when furnished to users as part of such service, such as a home page, electronic mail and instant messaging (including voice- and video-capable electronic mail and instant messaging), video clips, and personal electronic storage capacity; ``(D) does not include voice, audio or video programming, or other products and services (except services described in subparagraph (A), (B), (C), or (E) that utilize Internet protocol or any successor protocol and for which there is a charge, regardless of whether such charge is separately stated or aggregated with the charge for services described in subparagraph (A), (B), (C), or (E); and ``(E) includes a home page electronic mail and instant messaging (including voice--and video--capable electronic mail and instant messaging), video clips, and personal electronic storage capacity, that are provided independently or not packaged with Internet access.''; (3) by amending paragraph (9) to read as follows: ``(9) TELECOMMUNICATIONS.--The term `telecommunications' means `telecommunications' as such term is defined in section 3(43) of the Communications Act of 1934 (47 U.S.C. 153(43)) and `telecommunications service' as such term is defined in section 3(46) of such Act (47 U.S.C. 153(46)), and includes communications services (as defined in section 4251 of the Internal Revenue Code of 1986 (26 U.S.C. 4251)).'', and (4) in paragraph (10) by adding at the end the following: ``(C) SPECIFIC EXCEPTION.-- ``(i) SPECIFIED TAXES.--Effective November 1, 2007, the term `tax on Internet access' also does not include a State tax expressly levied on commercial activity, modified gross receipts, taxable margin, or gross income of the business, by a State law specifically using one of the foregoing terms, that-- ``(I) was enacted after June 20, 2005, and before November 1, 2007 (or, in the case of a State business and occupation tax, was enacted after January 1, 1932, and before January 1, 1936); ``(II) replaced, in whole or in part, a modified value-added tax or a tax levied upon or measured by net income, capital stock, or net worth (or, is a State business and occupation tax that was enacted after January 1, 1932 and before January 1, 1936); ``(III) is imposed on a broad range of business activity; and ``(IV) is not discriminatory in its application to providers of communication services, Internet access, or telecommunications. ``(ii) MODIFICATIONS.--Nothing in this subparagraph shall be construed as a limitation on a State's ability to make modifications to a tax covered by clause (i) of this subparagraph after November 1, 2007, as long as the modifications do not substantially narrow the range of business activities on which the tax is imposed or otherwise disqualify the tax under clause (i). ``(iii) NO INFERENCE.--No inference of legislative construction shall be drawn from this subparagraph regarding the application of subparagraph (A) or (B) to any tax described in clause (i) for periods prior to November 1, 2007.''. SEC. 5. CONFORMING AMENDMENTS. (a) Accounting Rule.--Section 1106 of the Internet Tax Freedom Act (47 U.S.C. 151 note) is amended-- (1) by striking ``telecommunications services'' each place it appears and inserting ``telecommunications'', and (2) in subsection (b)(2)-- (A) in the heading by striking ``SERVICES'', (B) by striking ``such services'' and inserting ``such telecommunications'', and (C) by inserting before the period at the end the following: ``or to otherwise enable users to access content, information or other services offered over the Internet''. (b) Voice Services.--The Internet Tax Freedom Act (47 U.S.C. 151 note) is amended by striking section 1108. SEC. 6. SUNSET OF GRANDFATHER PROVISIONS. Section 1104(a) of the Internet Tax Freedom Act is amended by adding at the end thereof the following: ``(3) EXCEPTION.--Paragraphs (1) and (2) shall not apply to any State that has, more than 24 months prior to the date of enactment of this paragraph, enacted legislation to repeal the State's taxes on Internet access or issued a rule or other proclamation made by the appropriate agency of the State that such State agency has decided to no longer apply such tax to Internet access.''. SEC. 7. EFFECTIVE DATE. This Act, and the amendments made by this Act, shall take effect on November 1, 2007, and shall apply with respect to taxes in effect as of such date or thereafter enacted, except as provided in section 1104 of the Internet Tax Freedom Act (47 U.S.C. 151 note). (As printed in the Congressional Record for the Senate on Oct 25, 2007.)