Paulson and Gutierrez urge permanent Internet tax ban

WASHINGTON (Reuters) - Treasury Secretary Henry Paulson and Commerce Secretary Carlos Gutierrez on Thursday urged the Senate to make permanent the moratorium on taxes for Internet access and electronic commerce.

In a statement, the cabinet secretaries said passage of legislation keeping the Internet free of access taxes by the time the current moratorium expires on November 1 would help keep the Internet an "innovative force".

The Senate Commerce Committee is expected to consider a bill to extend the moratorium on Thursday. The ban has been in place since 1998 and was last reinstated in 2004 for a period of three years.

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

"Preventing the taxation of Internet access will help sustain an environment for innovation, ensure that consumers continue to have affordable access to the Internet, especially high-speed Internet, and strengthen the foundations of electronic commerce as a vital and growing part of our economy," Paulson and Gutierrez said.