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Senate Passes Bill Making Internet Tax Ban Permanent (consumerist.com)
kheldan writes: Nearly two decades ago, Congress passed the first Internet Tax Freedom Act, establishing that — with a handful of grandfathered exceptions — local, state, and federal governments couldn't impose taxes on Internet access. Problem is, that law has had to be renewed over and over, each time with an expiration date. But today, the U.S. Senate finally passed a piece of legislation that would make the tax ban permanent.
"Permanent" in context means that they don't have to keep renewing the law.
Why not tax the internet? I can see not taxing it when it was a fledging system
The internet connectivity is sometimes taxed through telecommunications taxes, particularly federal ones.
The ban is on state/city taxation of network access.
It prohibits things such as providers having to pay a "Franchise tax" for every city, discriminatory taxes, E.g. "LAN Tax per Port", "bit tax", "bandwidth tax", "Tax per E-mail message", "$0.05 per Instant message, Tweet, or Facebook update"
The Tax Freedom act does not prohibit things such as Sales Tax on real or digital goods, and taxing the providers' profits.... Internet-based transactions are still subject to tax; it's the internet connectivity itself that is protected.