House panel backs Internet tax ban extension

WASHINGTON (Reuters) - A U.S. congressional committee on Wednesday endorsed legislation that would extend a moratorium on state Internet access taxes for four years.

The U.S. House of Representatives Judiciary Committee voted unanimously to endorse extension of the Internet tax ban after defeating Republican amendments that would have either extended the prohibition further or made it permanent, a committee spokeswoman said.

The current ban is scheduled to expire on November 1. Similar legislation has been stalled in the Senate Energy & Commerce Committee, where lawmakers are also divided about whether to extend it temporarily or make it permanent.

The ban has been in place since 1998, and was last reinstated by Congress in 2004 for a period of three years.

Internet service providers are supporting a permanent ban and say the price of Internet access could rise by as much as 17 percent if the moratorium on state taxes were allowed to expire.

The four-year extension is backed by the National Governors Association. It includes a "grandfather" clause that would allow a handful of states to continue imposing Internet taxes -- those that already had a tax enacted in 1998.

House Republican Whip Roy Blunt, of Missouri, issued a statement after the House Judiciary Committee vote urging Democrats to schedule a vote on a permanent ban.

"If Democrats think that extending the Internet tax moratorium for an additional four years is a good thing, then why not go the extra mile and make it permanent?" he said.

(Reporting by Peter Kaplan)