H.R. 3678 (110th): Internet Tax Freedom Act Amendments Act of 2007

110th Congress, 2007–2009. Text as of Sep 27, 2007 (Introduced).

Status & Summary | PDF | Source: GPO

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110th CONGRESS

1st Session

H. R. 3678

IN THE HOUSE OF REPRESENTATIVES

September 27, 2007

(for himself, Ms. Linda T. Sánchez of California, Mr. Cannon, Mr. Boucher, Mr. Watt, Mr. Issa, and Mr. Sensenbrenner) introduced the following bill; which was referred to the Committee on the Judiciary

A BILL

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

1.

Short title

This Act may be cited as the Internet Tax Freedom Act Amendments Act of 2007.

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 2011, and

(2)

in section 1104(a)(2)(A) by striking 2007 and inserting 2011.

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 amended by section 2(c) of the Internet Tax Nondiscrimination Act (Public Law 108–435).

(2)

Exceptions

Paragraph (1) shall not apply until November 1, 2007, 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 November 1, 2007, with respect to any tax subject to the exceptions described in subparagraphs (A) and (B) of paragraph (2).

.

4.

Definition

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; and

(D)

does not include voice, audio or video programming, or other products and services (except services described in subparagraph (A), (B), or (C)) 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), or (C).

,

(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

Effective November 1, 2007, the term tax on Internet access also does not include a State tax that—

(i)

is imposed on at least 80 percent of business enterprises engaged in business in the State without regard to—

(I)

the form of organization;

(II)

business activity in which such enterprise is engaged;

(III)

minimum filing thresholds;

(IV)

whether such business actually incurs a filing and payment obligation; and

(ii)

was enacted between June 30, 2005, and November 1, 2007, to replace, in whole or in part, a tax that, pursuant to section 1105(10)(B) or a modified value-added tax, is not a tax on Internet access.

.

5.

Conforming amendments

Section 1106 of the Internet Tax Freedom Act (47 U.S.C. 151 note) is amended—

(1)

in subsection (b)(2)—

(A)

in the heading by striking services, and

(B)

by striking such services and inserting such telecommunications, and

(2)

by striking services each place it appears.

6.

Effect on other laws

Section 1107 of the Internet Tax Freedom Act (47 U.S.C. 151 note) is amended by adding at the end the following:

(d)

Certain taxes on internet access

No State shall prohibit a provider of Internet access from—

(1)

collecting from customers, directly or indirectly, the amount of any tax described in section 1105(10)(C) that is imposed on Internet access revenues; or

(2)

separately stating the amount of such tax on customer bills.

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7.

Rule of construction

Section 1108 of the Internet Tax Freedom Act (47 U.S.C. 151 note) is amended by striking section 1108.