US Senate blocks net tax

A new bill in the US Senate has proposed to make internet services permanently free from tax.

The Senate Commerce Committee agreed to permanently extend the current temporary ban on internet access taxes that expires on 1 November.

A similar version of the bill has already been approved by a House of Representatives judiciary committee and must now pass through Congress and be signed by President Bush before becoming law.

Commerce Secretary Don Evans and Treasury Secretary John Snow praised the motion to permanently ban the levies.

"Keeping the internet free of multiple or discriminatory taxes on electronic commerce will help create an environment for innovation," they said in a joint statement.

The Senate Committee has proposed a ban on taxes for internet services as well as two other types of internet-specific taxes - taxes that treat internet purchases differently to other sales, and a multiple-state taxation of a single product bought on the web.

"As policy makers, we need to encourage the roll-out of new internet services and not stifle innovation by imposing new taxes," said Mr Evans and Mr Snow.