House passes Internet tax moratorium

WASHINGTON (AP) -- Computer users could surf without fear of taxes that single out the Internet for five more years under legislation passed by the House, part of a broader Republican agenda aimed at appealing to the high-tech industry.

The House voted 352-75 Wednesday for the bill, part of a Republican ''E-Contract 2000'' agenda intended to underscore their support for the high-tech sector, a prime campaign contribution battleground for both parties this election year. Other priority issues include repealing the 102-year-old 3 percent telephone excise tax, increasing visas for highly skilled foreign workers and granting digital signatures the force of law.

The moratorium bill, sent to the House floor without a single hearing, would extend for five years a current ban on Internet-specific taxes that expires in October 2001. The bill is designed to prevent states from taxing access to the Internet, such as requiring computer users to pay taxes on their America Online accounts. It also would bar new taxes aimed specifically at online activity, such as the amount of time a user spends on the Internet or how much material a user downloads.

The five-year tax moratorium measure now heads to the Senate, where it faces an uncertain future. Senate Commerce Committee Chairman John McCain, R-Ariz., put off consideration of his permanent Internet tax ban bill after it encountered stiff opposition last month.