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Text of S 2084, the Internet
Tax Ban Extension and Improvement Act,
as introduced
S. 2084: To revive and extend the Internet Tax Freedom Act for 2
years, and for other purposes.
IN THE SENATE OF THE UNITED STATES
February 12, 2004
Mr. ALEXANDER (for himself, Mr. CARPER, Mr. DORGAN, Mrs. FEINSTEIN,
Mr. GRAHAM of Florida, Mr. HOLLINGS, Mrs. HUTCHISON, Mr. INOUYE,
Mr. LAUTENBERG, Mr. ROCKEFELLER, and Mr. VOINOVICH) introduced the
following bill; which was read twice and referred to the Committee
on Commerce, Science and Transportation
_____
A BILL
To revive and extend the Internet Tax Freedom Act for 2 years, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Internet Tax Ban Extension and Improvement
Act'.
SEC. 2. 2-YEAR EXTENSION OF MORATORIUM.
Section 1101(a) of the Internet Tax Freedom Act (47 U.S.C. 151 note)
is amended--
(1) by striking `2003--' and inserting `2005:';
(2) by striking paragraph (1) and inserting the following:
`(1) Taxes on Internet access.'; and
(3) by striking `multiple' in paragraph (2) and inserting `Multiple'.
SEC. 3. EXCEPTIONS FOR CERTAIN TAXES.
The Internet Tax Freedom Act (47 U.S.C. 151 note) is amended--
(1) by redesignating section 1104 as section 1105; and
(2) by inserting after section 1103 the following:
`SEC. 1104. EXCEPTIONS FOR CERTAIN TAXES.
`(a) Pre-October, 1998, Taxes- Section 1101(a) does not apply to
a tax on Internet access (as that term was defined in section 1104(5)
of this Act as that section was in effect on the day before the
date of enactment of the Internet Tax Ban Extension and Improvement
Act) that was generally imposed and actually enforced prior to October
1, 1998, if, before that date, the tax was authorized by statute
and either--
`(1) a provider of Internet access services had a reasonable opportunity
to know by virtue of a rule or other public proclamation made by
the appropriate administrative agency of the State or political
subdivision thereof, that such agency has interpreted and applied
such tax to Internet access services; or
`(2) a State or political subdivision thereof generally collected
such tax on charges for Internet access.
`(b) TAXES ON TELECOMMUNICATIONS SERVICES- Section 1101(a) does
not apply to a tax on Internet access that was generally imposed
and actually enforced as of November 1, 2003, if, as of that date,
the tax was authorized by statute and either--
`(1) a provider of Internet access services had a reasonable opportunity
to know by virtue of a rule or other public proclamation made by
the appropriate administrative agency of the State or political
subdivision thereof, that such agency has interpreted and applied
such tax to Internet access services; or
`(2) a State or political subdivision thereof generally collected
such tax on charges for Internet access service.'.
SEC. 4. CHANGE IN DEFINITIONS OF INTERNET ACCESS SERVICE.
(a) IN GENERAL- Paragraph (3)(D) of section 1101(e) of the Internet
Tax Freedom Act (47 U.S.C. 151 note) is amended by striking the
second sentence and inserting `The term `Internet access service'
does not include telecommunications services, except to the extent
such services are purchased, used, or sold by an Internet access
provider to connect a purchaser of Internet access to the Internet
access provider.'.
(b) Conforming Amendments-
(1) Paragraph (2)(B)(i) of section 1105 of that Act, as redesignated
by subsection (a), is amended by striking `except with respect to
a tax (on Internet access) that was generally imposed and actually
enforced prior to October 1, 1998,'.
(2) INTERNET ACCESS- Paragraph (5) of section 1105 of that Act,
as redesignated by subsection (a), is amended by striking the second
sentence and inserting `The term `Internet access' does not include
telecommunications services, except to the extent such services
are purchased, used, or sold by an Internet access provider to connect
a purchaser of Internet access to the Internet access provider.'.
(3) Paragraph (10) of section 1105 of that Act, as redesignated
by subsection (a), is amended to read as follows:
`(10) Tax on internet access-
`(A) IN GENERAL- The term `tax on Internet access' means a tax on
Internet access, regardless of whether such tax is imposed on a
provider of Internet access or a buyer of Internet access and regardless
of the terminology used to describe the tax.
`(B) GENERAL EXCEPTION- The term `tax on Internet access' does not
include a tax levied upon or measured by net income, capital stock,
net worth, or property value.'.
SEC. 5. ACCOUNTING RULE.
The Internet Tax Freedom Act (47 U.S.C. 151 note) is amended by
adding at the end the following:
`SEC. 1106. ACCOUNTING RULE.
`(a) IN GENERAL- If charges for Internet access are aggregated with
and not separately stated from charges for telecommunications services
or other charges that are subject to taxation, then the charges
for Internet access may be subject to taxation unless the Internet
access provider can reasonably identify the charges for Internet
access from its books and records kept in the regular course of
business.
`(b) DEFINITIONS- In this section:
`(1) CHARGES FOR INTERNET ACCESS- The term `charges for Internet
access' means all charges for Internet access as defined in section
1105(5).
`(2) CHARGES FOR TELECOMMUNICATIONS SERVICES- The term `charges
for telecommunications services' means all charges for telecommunications
services except to the extent such services are purchased, used,
or sold by an Internet access provider to connect a purchaser of
Internet access to the Internet access provider.'.
SEC. 6. EFFECT ON OTHER LAWS.
The Internet Tax Freedom Act (47 U.S.C. 151 note), as amended by
section 4, is amended by adding at the end the following:
SEC. 1107. EFFECT ON OTHER LAWS.
`(a) UNIVERSAL SERVICE- Nothing in this Act shall prevent the imposition
or collection of any fees or charges used to preserve and advance
Federal universal service or similar State programs--
`(1) authorized by section 254 of the Communications Act of 1934
(47 U.S.C. 254); or
`(2) in effect on February 8, 1996.
`(b) 911 and E-911 Services- Nothing in this Act shall prevent the
imposition or collection, on a service used for access to 911 or
E-911 services, of any fee or charge specifically designated or
presented as dedicated by a State or political subdivision thereof
for the support of 911 or E-911 services if no portion of the revenue
derived from such fee or charge is obligated or expended for any
purpose other than support of 911 or E-911 services.
`(c) NON-TAX REGULATORY PROCEEDINGS- Nothing in this Act shall be
construed to affect any Federal or State regulatory proceeding that
is not related to taxation.'.
SEC. 7. EFFECTIVE DATE.
The amendments made by this Act take effect November 1, 2003.
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