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Congress mulls repealing domain tax

A House subcommittee hears testimony about a bill that would reverse a $15-per-year fee paid by domain name owners to improve the Net's infrastructure.

Congress is once again considering revoking a tax collected from millions of Internet domain name registrants.

Today the House Basic Research Subcommittee heard testimony about Rep. Lee Terry's (R-Nebraska) Home Page Tax Repeal Act.

Terry's bill would reverse a $15-per-year fee paid by domain name owners to improve the Net's infrastructure.

The fee was challenged in a lawsuit filed by the American Internet Registrants Association, and was temporarily struck down by U.S. District Judge Thomas Hogan.

But Hogan threw out the lawsuit after Congress retroactively approved the tax last year. The tax was collected by the primary domain registrar Network Solutions and handed over to the National Science Foundation.

The country's official domain name registrar since 1995, Network Solutions has collected $100 every two years for each registration; $70 for the registration itself, plus $30 that was designated for a fund to improve the workings of the Internet. The company stopped collecting the fee last April during the court battle.

Now Terry once again is trying to annul the fee permanently.

"Slipping ratification of this tax into an emergency funding bill, after a court had ruled it unconstitutional, was wrong," Terry said in a statement. "My Homepage Tax Repeal Act would do away with this and keep our policy consistent."

If the bill passes, $39.2 million plus interest--which brings the pot up to more than $50 million--will be returned to domain name owners.