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Washington, D.C. – The U.S. House passed a resolution recently that will help keep the internet affordable and accessible for all Americans, according to U.S. Senator Mike Enzi, R-Wyo.

Enzi made the following floor statement on the internet tax moratorium.

Floor Statement
S. Con. Res. 146, Internet Access Tax Moratorium
By Senator Mike Enzi
November 19, 2004

Mr. President,

The Internet plays a critical role in today's global economy. It allows us to work harder, faster, and more efficiently. With the click of a mouse, we can seal business deals, send birthday cards, and buy cars. We have come to rely on its ability to connect us with people and places around the world. Today Congress cleared an important piece of legislation that will help keep the internet affordable and accessible for all Americans.

Today's passage in the House of S. Con. Res. 146, which amends S. 150, signals the end of months of long and difficult negotiations. I would like to commend my colleagues, Senators Allen, Wyden, Alexander, Carper, Voinovich and McCain for their commitment to this issue. Their hard work has allowed us to pass a fair and reasonable moratorium on internet access taxes. The moratorium will protect all Internet users, regardless of connection platform, while ensuring that states and localities do not lose billions in tax revenue.

The moratorium on internet access taxes is necessary now because broadband technology is still in its infancy in many parts of the country. In Wyoming, we have a number of small towns where Internet service is limited to 14.4 Kbps dial-up service. At that speed, it takes all day to download one song – a song that was legally obtained, of course. The only way we are going to improve the availability of broadband services in places like rural Wyoming is by eliminating unnecessary and burdensome taxation and regulation. Consumers in every part of the country want and deserve internet access. The internet access tax moratorium will make sure they can afford to subscribe to whatever service is available. I am confident that as more consumers spend their hard-earned money on Internet services, the cable companies, telephone carriers, satellite providers and other Internet service providers (ISPs) will invest more of their money in deploying high-speed broadband services.

Renewing the Internet tax moratorium is important for consumers, but it is also a major issue for states and local communities that rely on certain tax revenue from telecommunications. These state and local governments have made the decision to tax certain services and, as a former mayor and state legislator, I respect their ability to do so. However, I agree with my colleagues that Internet access is a special service that should be tax free. The difficult part is trying to define what "Internet access" actually is. We have spent months listening to telecommunications providers, consumers, and local officials define what telecommunications services are and when and where telecommunications taxes should start and stop. Not surprisingly, the groups have disagreed more often than not. Despite the struggle, I believe we came up with a reasonable compromise on the definition and the grandfather clauses, which will give our state and local governments the time they need to phase out taxes imposed prior to the moratorium.

Now that we have passed the moratorium on Internet access taxes, I am anxious to refocus some of our energy on a bill I introduced in both the 107th and 108th Congresses. The Streamlined Sales and Use Tax Act would simplify the extremely cumbersome network of state sales and use taxes and help States begin to recover from years of budgetary shortfalls. The bill would authorize States that have signed the Streamlined Sales and Use Tax Agreement and have passed legislation simplifying their tax system to require all sellers to collect and remit sales taxes.

My streamlined bill, which has 20 cosponsors this year, is a critical bill that many of my colleagues are learning more about and recognizing its growing importance as Internet usage explodes. Two years ago the revenue loss attributed to the Internet sales tax loophole was fairly minimal. Today, the revenue loss has ballooned as online and other remote sales have increased. The States have responded to this budget crisis by signing the Streamlined Sales and Use Tax Agreement and implementing legislation that drastically simplifies their sales and use tax systems. In fact, 21 States have already signed into law the necessary implementing legislation, while 8 others are currently in the process of doing so.

As the states continue to make progress on reforming their sales tax systems, I would urge Congress to make progress on a bill that will provide to the states the authority they need to collect their own taxes. I intend to introduce the Streamlined Sales and Use Tax Act again next year and hope to work with the Finance Committee Chair and other members of the Senate to pass it into law.

In the meantime, I am pleased we will have in place a moratorium that recognizes the importance of the Internet and will allow it to grow and prosper in the coming years. Thank you, Mr. President. I yield the floor.