Senate OKs 7 Years of No Email Tax

A bill that would prohibit state and local governments from taxing any service that enables users to connect to the Internet and some related services through 2014 was passed by the Senate on Thursday.  It must go to the House and then to the President for signature.  Hopefully, it will all be finished when the current ban expires on November 1st.

Prior to the change, a loophole would have allowed a tax on email from hosted services, such as Google and Yahoo.  ISP providers would have been exempted from the tax as part of a tax break for Internet access.  The modified Senate bill now says states can't tax "home page electronic mail and instant messaging (including voice--and video--capable electronic mail and instant messaging), video clips, and personal electronic storage capacity, that are provided independently or not packaged with Internet access."