A concurrent resolution to direct the Secretary of the Senate to make corrections in the enrollment of the bill S. 150.

Mr. Speaker, I yield myself such time as I may consume, which will be a very short amount of time, just to make two points.

Number one, the chairman of my committee and I have served so long together that he did not even flinch when I was debating a bill that I thought was all part of one big parcel, because he has seen me many times debate something that we were not discussing in committee, so it did not come as any surprise to him at all. He did not even flinch.

So I think on that what I will do is roll the statement that I read on S. 150 into this debate. That was the discussion on the last bill. I thought we were doing this, all this part and parcel of one big bill here, rather than in two stages. So I hope I can just roll that last statement on to this debate and save myself from having to read it again.

Second, I would just say to the gentleman on his ``do not surprise us in the next Congress'' that I think there has been a long-term agreement and commitment to making the Internet exempt from taxation a permanent moratorium. The thing that has held that up is that, at the same time, States and local governments have wanted to work out a national uniform system for taxing remote sales that take place over the Internet so that they do not lose substantial revenues from that source. So I think if we could come up with a system to put into place some uniform standards for taxation of remote sales over the Internet, making the moratorium on Internet access would be a no-brainer and a very noncontroversial step.

So I would hope that I would be able to join the chairman of the full committee in supporting a permanent moratorium on Internet access taxes, but I would be able to do that only if we can work out this other deal having to do

with putting in place a taxation system for taxation of remote sales that are taking place over the Internet.

Because what is happening now is that brick and mortar retailers in all of our communities are collecting sales taxes on sales that are taking place in those brick and mortar stores and, at the same time, people are able to buy over the Internet the same product and be exempt from paying taxes on it because there is no uniform way for collecting those taxes at remote locations. That is costing local governments and State governments in some cases enormous amounts of tax revenues, because most of them are supported by sales taxes or local property taxes, and this is eroding a primary base of tax income for local communities and State communities.

So if we can get that part of this equation worked out, I think the chairman would see a virtual landslide of support for making the moratorium on Internet access a permanent moratorium, and I would be right in the lead of the march with my chairman, and I hope he will join us in trying to make that happen in the next term of Congress.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in support of S. 150, the Internet Tax Nondiscrimination Act, and urge my colleagues to support its passage. It has been a long journey to get here, but I believe that the compromise forged in the Senate preserves the goals we sought here in the House both at the subcommittee and full committee levels.

Specifically, S. 150 extends the existing moratorium against taxes on Internet access by all State and local governments, including those that were previously grandfathered by the Internet Tax Freedom Act, and there is a new grandfather for States that imposed taxes on access to the Internet until November 1, 2005. Although this bill will necessarily result in the potential loss of some revenue to some States, it will promote the continued development, emergence, and widespread access to the Internet; and it will do so in a fair and technologically neutral manner.

During the proceedings on this bill in the House, I, together with the gentleman from Utah (Mr. Cannon), the chairman of the Subcommittee on Commercial and Administrative Law, on which I am the ranking member, offered an amendment to help clarify the meaning of Internet access and to put an end to the current confusion that has led to discriminatory and inconsistent State taxation on Internet access. The bill before us today represents a compromise on that amendment which is supported by the relevant stakeholders, including the industry and the State and local government representatives.

The principle I pursued in offering the amendment was simple: If we are to prohibit taxes on Internet access, we must do so regardless of how that access is provided. Otherwise, we would give a competitive advantage to those providers covered by the moratorium over those providers that remain subject to taxation. This would limit the choices of consumers and raise the cost of alternative means of accessing the Internet such as DSL. By making the moratorium applicable to all Internet service providers, we have created a level playing field for the consumer. In the process, we have had no intention to otherwise undermine State and local telecommunications tax bases.

With this issue now behind us if we pass this bill, this Congress must turn to the issue of State sales and use taxes. I, along with the gentleman from Massachusetts (Mr. Delahunt) and other colleagues on our subcommittee, have insisted throughout our deliberations to ban Internet access taxes that we remain mindful of the fiscal crisis currently confronting many of our States. Toward that end, the States' attempt to establish a unified tax system that would enable them to impose and collect sales taxes on transactions over the Internet in a manner that is fair and manageable has progressed; and I believe that during the next term of Congress we will be able to work toward a sensible solution to solve the remote sales tax issue when remote sales are taking place over the Internet.

In closing, I believe that S. 150 will ensure that the ban on Internet access taxes is neutral as to technology, speed, and provider. I urge my colleagues to vote in favor of this bill.

I thank the gentleman for his hard work on this and certainly thank the gentleman from Utah (Mr. Cannon), my subcommittee Chair, in his absence, for the tremendous amount of work he has put into this issue.

Mr. Speaker, I have no further requests for time either on S. Con. Res. 146, which I thought I was debating the last time, or on S. 150, which I understand we are debating now, so I will be happy, unless the chairman wants to promise me he is going to work with me on this remote sales tax issue and wants to have a dialogue about that, I am happy to yield back the balance of my time, or yield to the chairman if he wants to comment on it.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I would just like to assure the gentleman from California (Mr. Cox) that he did not really say anything that I disagree with. Neither did the chairman say anything that I disagree with.

I agree that taxation of Internet access and taxation of remote sales are like apples and oranges. But both of them have economic impact on State and local communities, and just because they are apples and oranges does not mean that they do not have an economic impact. So what has been keeping this from moving forward is that if you take away the Internet access issue and you do not resolve the remote sales issue, then local and State communities are being doubly impacted in some cases, and they would like us to resolve both of those issues. They do not necessarily want us to mix orange juice and apple juice together, but they do want us to be able to drink apple juice at one point and drink orange juice at the other point, and they are not mutually exclusive, and they have a similar impact in local communities.

So I am in full agreement that we ought to make this moratorium permanent on Internet access. I am supporting both of these bills, and I do not think there is any controversy about that.

My only point is we also need to now roll up our sleeves in this next term of Congress and resolve the remote sales tax issue so that we can put all of this to rest, and then we can drink both apple juice and orange juice and enjoy both of them in due course.

Mr. Speaker, I have no other speakers, and I yield back the balance of my time.

Mr. President, on Wednesday of this week, by unanimous consent, the Senate adopted S. Con. Res. 146, which made slight modifications to S. 150, the Internet Tax Non-Discrimination Act.

I am pleased that the House passed S. 150 with the Senate changes, thereby clearing the legislation for President Bush's signature. It is long overdue.

This action ensures that Internet access will remain free from taxation, a policy that has existed since 1998, when, as Governor of Ohio and president of the National Governors Association, I helped negotiate the first moratorium.

I rise to commend my colleagues in the House and the Senate for resolving this issue in a bipartisan manner. Just over a year ago, the Senate became engaged in a spirited debate over the future of the Internet tax moratorium.

The sponsors of S. 150 argued that an expanded and permanent Internet tax moratorium was necessary to facilitate the growth of broadband Internet technologies.

On the surface, this sounded like a very reasonable position. In fact, after studying this issue, I realized that not all Internet technologies were being treated equally. For instance, some States treated digital subscriber line, DSL, service, which uses phone lines to provide high-speed Internet access, as a ``telecommunications service'' and therefore taxed it. Other States treated DSL Internet access as an ``information service'' exempt from taxation. The inconsistent treatment of DSL service created a competitive disadvantage for some Internet service providers, and I was willing to help level the playing field. However, several of my colleagues and I, including Senators Alexander, Carper, Feinstein, and Bob Graham of Florida, had more serious concerns with S. 150.

Specifically, the CBO stated that the new and expanded definition of ``Internet access'' in S. 150 was an unfunded mandate. Therefore, it was believed that S. 150 would cause significant revenue losses for our State and local governments at a time when they were facing their worst economic crisis in a generation.

In fact, the State of Ohio projected revenue losses of up to $350 million per year if the Commerce Committee's version of S. 150 passed the Senate. As a former mayor and Governor, I knew my State could not afford to lose $350 million per year.

Fortunately, the debate on S. 150 was taken off the floor, where Members and staff could try to close the chasm that separated the two sides. From November 2003 to April 2004, Members and staff worked feverishly to find common ground. Both sides listened and worked in good faith. Although it took a few months, I was pleased with the end result.

The final bill, which passed the Senate on April 29, 2004, by a vote of 93 to 3, created a level playing field for Internet service providers sought by the bill's sponsors, while at the same time protected State and local governments from any immediate financial harm.

I was pleased that the original grandfather clause was extended for the length of the moratorium because it provided protections to States, including Ohio, from losing further revenue.

Finally, the negotiated 4-year term of this legislation provides Congress with the necessary time to examine and understand how the new and expanded definition of ``Internet access'' affects both the growth of broadband Internet service and the revenue base of State and local governments. There has to be some balance.

Senator Stevens assures me that the Commerce Committee will closely reexamine these issues next Congress. In fact, we just talked about it 10 minutes ago, about the fact he wants to move forward very expeditiously to tackle this very complicated subject.

I commend the Presiding Officer, Senator Allen, and Senator Wyden for their leadership and commitment to this issue. Certainly, no two Members of the Senate have spent more time on it. I also thank Senator McCain for his patience and perseverance and willingness to offer a reasonable compromise upon which both sides could agree.

Additionally, I offer my thanks to Senators Alexander and Carper. Their vision and steadfast determination to protect State and local governments is commendable, and I was proud to work so closely with my colleagues and former Governors on this issue.

Finally, I would be remiss if I did not thank the staff of the Presiding Officer and the staff of other Senators for their hard work and dedication. They really rolled up their sleeves and went to work. They spent hours, countless hours, negotiating subtle yet important nuances in the legislative language in order to reach a compromise. Some of those nuances I had a very difficult time understanding, but they understood them, thank God. The debate and end result of the Internet tax moratorium proves we can work through difficult and highly technical issues in a bipartisan manner.

As the 108th Congress comes to a close, it is my sincere hope that the same type of bipartisan spirit can be extended into the 109th Congress. It is vital that Members of this body work together to find common ground on issues that are important to our citizens, our States, our country, and, in some instances, the world.

I, for one, am looking forward to the challenges we face and am confident we can solve the difficult issues for our day and leave a lasting legacy for our children, grandchildren, and future generations.

Mr. President, I yield the floor and suggest the absence of

a quorum.

Mr. Speaker, I move to suspend the rules and pass the Senate bill (S. 150) to make permanent the moratorium on taxes on Internet access and multiple and discriminatory taxes on electronic commerce imposed by the Internet Tax Freedom Act.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on S. 150, the Senate bill currently under consideration.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise today in support of S. 150, the Internet Tax Nondiscrimination Act.

In 1998, Congress passed the Internet Tax Freedom Act to protect the Internet from crippling taxation and piecemeal regulation. The act prohibited States from imposing multiple and discriminatory taxes on electronic commerce and shielded consumers from new Internet access taxes. However, some States that had already begun taxing on Internet access by 1998 were allowed to continue such taxation temporarily.

During the 107th Congress, we extended the moratorium until November 1, 2003. On July 24, 2003, well before the November expiration deadline, the House Committee on the Judiciary reported H.R. 49, the Internet Tax Nondiscrimination Act. Introduced by the gentleman from California (Mr. Cox), H.R. 49 made permanent the ban on taxes that targeted the Internet for discriminatory treatment and immediately ended all taxes on Internet access by all States and localities.

Unlike the Senate bill, H.R. 49 also eliminated the so-called grandfather clause for States that taxed Internet access prior to October 1, 1998; and through a bipartisan amendment offered in subcommittee by the gentleman from Utah (Mr. Cannon) and the gentleman from North Carolina (Mr. Watt), the House bill preserved the original intent of the law by not punishing broadband users, then providing tax freedom for all forms of Internet access, whether by dial-up, cable, or DSL line. H.R. 49 passed the House by voice vote on September 17, 2003. Unfortunately, the other body was unable to pass legislation extending the moratorium until April 29, 2004, 6 months after the moratorium expires.

The Senate bill differs from H.R. 49 in several ways. First, rather than a permanent moratorium, it creates a temporary 4-year moratorium on Internet access taxes running retroactively from November 1, 2003, until November 1, 2007. Secondly, it extends the 1998 grandfather clause for the life of the moratorium so that all those States currently taxing Internet access will continue to do so with the one notable exception of Wisconsin, which I already addressed fully when we considered the related enrolling resolution.

Third, it creates a new, 2-year grandfather clause for States that tax Internet access after the expiration of the moratorium.

Despite these weaknesses which I believe to be substantial, passing the Senate bill extending the Internet tax moratorium is still a big win for the vast majority of American Internet users. Without any action by this Congress, Internet commerce would still be subject to State and local taxes in thousands of jurisdictions. The digital economy and its participants are more vulnerable if we do not act, even if we must act on a weaker bill.

For those reasons I support passage of S. 150, which will extend the benefits of the moratorium until 2007.

At this time, let me put everyone on notice that in the next Congress, even though the moratorium does not expire during the life of the 109th Congress, I will attempt, once again, to make this moratorium permanent so that no State, when it puts together its budget in January of 2007, will fall into the trap of counting Internet access taxes as revenue.

The bill, together with the enrolling resolution just passed, will at least temporarily protect against those States and localities taxing our e-mail and taxing Web service. The extension of the moratorium will help vitalize the Internet economy, provide tax relief to consumers no matter how they get their Internet access, and will stimulate equal access to this increasingly important medium. I will continue to assess future avenues that will promote greater Internet access at higher speeds and at less cost for all Americans. Let everybody be on notice that that is going to happen sooner rather than later.

For now, I urge my colleagues to join me in supporting S. 150 and making the Internet a less taxing and more productive experience.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself 15 seconds to say that access taxes and remote sales tax collections are two separate issues. It is like apples and oranges, and when you mix apple juice and orange juice in the same concoction, frequently it is not very tasty. But we will deal with both of those issues and consider them in the next Congress.

Mr. Speaker, I yield such time as he may consume to the gentleman from California (Mr. Cox), the author of H.R. 49.

Mr. Speaker, I yield back the balance of my time.

Mr. President, the Internet plays a critical role in today's global economy. It allows us to work harder, faster, and more efficiently. With the click of a mouse, we can seal business deals, send birthday cards, and buy cars. We have come to rely on its ability to connect us with people and places around the world. Today Congress cleared an important piece of legislation that will help keep the internet affordable and accessible for all Americans.

Today's passage in the House of S. Con. Res. 146, which amends S. 150, signals the end of months of long and difficult negotiations. I would like to commend my colleagues, Senators Allen, Wyden, Alexander, Carper, Voinovich and McCain for their commitment to this issue. Their hard work has allowed us to pass a fair and reasonable moratorium on internet access taxes. The moratorium will protect all Internet users, regardless of connection platform, while ensuring that states and localities do not lose billions in tax revenue.

The moratorium on internet access taxes is necessary now because broadband technology is still in its infancy in many parts of the country. In Wyoming, we have a number of small towns where Internet service is limited to 14.4 Kbps dial-up service. At that speed, it takes all day to download one song--a song that was legally obtained, of course. The only way we are going to improve the availability of broadband services in places like rural Wyoming is by eliminating unnecessary and burdensome taxation and regulation. Consumers in every part of the country want and deserve internet access. The internet access tax moratorium will make sure they can afford to subscribe to whatever service is available. I am confident that as more consumers spend their hard-earned money on Internet services, the cable companies, telephone carriers, satellite providers and other Internet service providers, ISPs, will invest more of their money in deploying high-speed broadband services.

Renewing the Internet tax moratorium is important for consumers, but it is also a major issue for states and local communities that rely on certain tax revenue from telecommunications.

These state and local governments have made the decision to tax certain services and, as a former mayor and State legislator, I respect their ability to do so. However, I agree with my colleagues that Internet access is a special service that should be tax free. The difficult part is trying to define what ``Internet access'' actually is. We have spent months listening to telecommunications providers, consumers, and local officials define what telecommunications services are and when and where telecommunications taxes should start and stop. Not surprisingly, the groups have disagreed more often than not. Despite the struggle, I believe we came up with a reasonable compromise on the definition and the grandfather clauses, which will give our state and local governments the time they need to phase out taxes imposed prior to the moratorium.

Now that we have passed the moratorium on Internet access taxes, I am anxious to refocus some of our energy on a bill I introduced in both the 107th and 108th Congresses. The Streamlined Sales and Use Tax Act would simplify the extremely cumbersome network of State sales and use taxes and help States begin to recover from years of budgetary shortfalls. The bill would authorize States that have signed the Streamlined Sales and Use Tax Agreement and have passed legislation simplifying their tax system to require all sellers to collect and remit sales taxes.

My streamlined bill, which has 20 cosponsors this year, is a critical bill that many of my colleagues are learning more about and recognizing its growing importance as Internet usage explodes. Two years ago the revenue loss attributed to the Internet sales tax loophole was fairly minimal. Today, the revenue loss has ballooned as online and other remote sales have increased. The States have responded to this budget crisis by signing the Streamlined Sales and Use Tax Agreement and implementing legislation that drastically simplifies their sales and use tax systems. In fact, 21 States have already signed into law the necessary implementing legislation, while 8 others are currently in the process of doing so.

As the States continue to make progress on reforming their sales tax systems, I would urge Congress to make progress on a bill that will provide to the states the authority they need to collect their own taxes. I intend to introduce the Streamlined Sales and Use Tax Act again next year and hope to work with the Finance Committee Chair and other members of the Senate to pass it into law.

In the meantime, I am pleased we will have in place a moratorium that recognizes the importance of the Internet and will allow it to grow and prosper in the coming years.

(At the request of Mr. Daschle, the following statement was ordered to be printed in the Record.)

Mr. Speaker, I thank the gentleman from Wisconsin (Chairman Sensenbrenner) and thanks also to the gentleman from Michigan (Ranking Member Conyers) for the Committee on the Judiciary's staunch leadership on this issue. Special thanks also to the chairman of the Subcommittee on Commercial and Administrative Law of the Committee on the Judiciary, the gentleman from Utah (Mr. Cannon), and, of course, to the Ranking Member, the gentleman from North Carolina (Mr. Watt), the author of a critical amendment to this bill which makes it explicit that the Internet tax moratorium provides consumers with tax freedom from all forms of Internet access, regardless of the technology, wired or wireless, broadband or dial-up, or any pathway yet to be invented.

While I am proud to be the author of the Internet Tax Freedom Act, which created the Internet tax moratorium in 1998, and the Internet Tax Nondiscrimination Act, which passed this Congress unanimously last year, this is the work of a great bipartisan team led on the Senate side by George Allen of Virginia and my original moratorium coauthor, who was then a member of the House, Ron Wyden of Oregon, and by President Bush who urged this Congress to extend this most valuable of consumer protections from taxation.

Republicans and Democrats have come together to say that, no matter how we might choose to fund government services, we all agree that the worst way to do it would be to create new taxes on the Internet. That would be harmful to consumers, destructive to technological innovation, and bad for our economy.

The case for allowing Internet access to remain tax-free has never been stronger. With 200 million Americans now online, a new tax on access would be a tax on working families. Our citizens recognize the danger. Eighty-eight percent of Americans oppose new Internet access taxes. So one might say that this legislation, the Internet Tax Freedom Act and the Internet Nondiscrimination Act, this moratorium, are the most popular tax issues in America.

New Internet taxes would also be highly destructive to the American economy. Studies from the Brookings Institution, the University of California, Harvard, Stanford, MIT, the Congressional Budget Office, the Department of Commerce, and the Federal Reserve all confirm the positive role of the Internet in making Americans more productive. New taxes can only slow this valuable and powerful engine of our economy and job growth, productivity and prosperity in America.

Finally, Mr. Speaker, the United States of America needs to regain world leadership in encouraging other countries around the world to keep taxes off of the World Wide Web. The Internet is truly global commerce. The original Internet Tax Freedom Act instructed the executive branch to negotiate bilateral understandings with

other countries, and our executive branch has done so. During the period of time when this moratorium was expired, America could hardly lead when our own policy was not clear that we forbid taxation of the Internet. Now we are back where we belong in our role of world leadership, and the Bush administration can once again resume with confidence negotiations with other countries to make sure that when we go online it is not just other foreign states that will not be taxing you, your Internet activities will not be prey to predatory tax policies from other countries as well.

Mr. Speaker, I urge all Members to vote yes on this excellent legislation, S. 150, and yes on the enrolling resolution. I thank the chairman for this great success for consumers.