The Internet Tax Freedom Act, designed to halt new taxes on Internet access and services, is being debated by the US Senate after passing through the House in early summer.
The Senate is discussing the merits of a two-year moratorium on taxes based on data volumes, the so-called ?bit tax?, versus a three-year ban on Net taxes with a special clause allowing states to enact retrospective taxation.
The Internet industry is opposed to this clause, arguing that it could damage online services. It would allow states to apply old tax models, designed for telecommunications and utilities specifically, to Internet and Web based businesses.
The clause remains a sticking point although the House has stated that states should re-enact any such taxes before imposing them on business.
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