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House may ban Net taxes for another four years

Panel schedules Wednesday vote on bill that would extend an existing law that prohibits state and local governments from taxing Internet access services.

Under mounting pressure from their Republican colleagues, the Democrats on a U.S. House of Representatives panel have finally scheduled a vote on a bill that would extend by four years a soon-to-expire federal ban on Internet access taxes.

The House Judiciary Committee has placed a bill known as the Internet Tax Freedom Act on its lengthy agenda for a meeting slated to begin on Wednesday morning.

An existing law that generally prohibits state and local governments from taxing Internet access--including DSL (digital subscriber line), cable modem and BlackBerry-type wireless transmission services--is currently set to expire November 1. It also prohibits "discriminatory" taxes that treat products sold on the Internet differently than those in brick-and-mortar stores, but it does not deal with the separate issue of .

The proposal planned for consideration Wednesday wouldn't make the current tax ban permanent, as the Bush administration, many Republican politicos and Democrats in primarily tech-heavy districts have advocated. Instead, it would extend the moratorium until November 1, 2011, which local officials argue is necessary to revisit the need for levying such taxes. (Practices right now vary by state: a few already impose the taxes because their rules have been "grandfathered" in, while others, like Colorado, already have "permanent" tax bans on their books.)

It's far from clear, however, whether the committee will get around to considering the bill on Wednesday. Eight other bills--including a sure-to-be contentious rewrite of the Protect America Act, which authorized expanded spying powers for the executive branch--are also on the roster for debate. House Majority Leader Steny Hoyer (D-Md.) has said the plan is to send the eavesdropping bill to the floor for a vote by next week, which means it's potentially more of a priority than the Internet tax measure.

It's also unclear when the Senate, which is out this week for a Columbus Day recess, will act on its version of the proposal. It has already once yanked the bill from committee consideration, citing continuing negotiations.