Last week saw still more back-and-forth on the Internet tax debat...

Last week saw still more back-and-forth on the Internet tax debate, with supporters of S-150 by Sen. Allen (R-Va.) touting an endorsement from the Center for Democracy & Technology (CDT), a group that hadn’t been active in the debate. Commerce Dept. Secy. Donald Evans called in Hill testimony for a permanent ban on discriminatory Internet taxes and access taxes, an endorsement praised by groups such as the Consumer Internet Access Coalition, a group backed by telecom companies and anti-tax groups. Supporters of alternative legislation (S-2184) by Sen. Alexander (R-Tenn.) took issue with Evans’ remarks. National Assn. of Counties (NACo) Exec. Dir. Larry Naake said Evans had failed to note that S-150 would broadly expand the definition of Internet access, “giving major tax breaks to the telecommunications industry, and in turn, hurting state and local taxpayers by creating a huge unfunded mandate.” But a CDT paper said a manager’s amendment to S-150 by Allen “responds to the central concerns that have been expressed about the moratorium.” CDT’s James Dempsey and Paula Bruening said that amendment “seems to respond to the states’ concern that the House bill is too broad by making it clear that telecommunications services bundled with Internet services are not exempt from the bill.” CDT said the moratorium, by helping keep the Internet affordable, has contributed to the medium’s great growth, which CDT believes is critical to expansion of democratic participation, innovation and creativity. “The Internet tax debate is arising in part because of the success of communications policies put in place over the course of the last decade,” CDT said. Alexander has expressed concern that migrating voice traffic to VoIP could hurt states relying on telecom taxes. His bill extends the moratorium only 2 years to give Congress and regulators time to assess VoIP. But CDT said it’s “impossible to achieve a one-size-fits-all regulatory categorization of VoIP, and the Internet access tax debate should not be held up for that.” CDT also took issue with the grandfathering in the Alexander bill, which not only would keep taxes grandfathered in after the original 1998 bill, but also DSL taxes imposed in recent years that resulted in the new language in S-150. Bruening told us this isn’t an issue CDT regularly is involved in, and it was “difficult to parse,” but CDT believed the group should take a position on the issue given its importance.