Internet Tax Ban Extended

Knoxville — The House of Representatives has voted to extend a ban on taxing the Internet for another five years.

A University of Tennessee economist said the bad points of the ban outweigh the good.

“The moratorium is positive in that it prevents discriminatory taxation,” said Dr. Bill Fox. “The problem is that if it is extended to prohibit taxation of sales over the Internet, it discriminates against mainstream businesses.”

The House voted to extend the moratorium until October 2006. Republicans argued for extending the ban, while Democrats argued against it.

Fox said the issue has become politicized.

“Some politicians are voting against it so they can say they are anti-tax or low-tax people,” Fox said, “or to get campaign contributions from the Internet industry.”

The bill now goes to the Senate for discussion.