Senators propose two-year Internet tax ban

<br>WASHINGTON (AP) _ Senate opponents of a permanent ban on taxing Internet access proposed extending a moratorium two years, saying their plan would soothe state and local officials worried about losing

Wednesday, February 11th 2004, 12:00 am

By: News On 6

WASHINGTON (AP) _ Senate opponents of a permanent ban on taxing Internet access proposed extending a moratorium two years, saying their plan would soothe state and local officials worried about losing a tax base to new technology.

The senators said Wednesday their bill would offer a temporary fix while Congress and federal regulators assess how to respond to the increasing use of the Internet for phone service and downloading videos, TV shows and music.

States and local governments feared the permanent ban, which stalled in the Senate last year, would have restricted their ability to tax such services.

``It's a temporary solution. The other position is permanent confusion that could cost state and local governments billions and billions of dollars,'' said Sen. Lamar Alexander, R-Tenn.

Alexander was joined at a Capitol Hill news conference by Sens. Kay Bailey Hutchison, R-Texas; Tom Carper, D-Del.; and Dianne Feinstein, D-Calif.

Proponents of the permanent ban sought by the high-tech industry said local governments' claim they would losing their ability to tax telecommunications was unfounded.

``The proposal offered today would continue to allow harmful, regressive taxes on Internet access services, especially high-speed, broadband service,'' said Sen. George Allen, R-Va., who with Sen. Ron Wyden, D-Ore., is leading the attempt to get a permanent ban.

Backers of both positions said they hoped for Senate votes on their legislation this year.