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Taxes On Your Internet Bill If Moratorium Expires? Not Likely.

Republicans have found another fiscal issue they believe is a winner against Democrats _ the looming expiration of the Internet tax moratorium.

In recent days, Republican leaders have began warning that Democrats are going to allow the prohibition on Internet taxation to lapse, opening the door for every state to start adding a levy to your Internet bill.

House Minority Leader John Boehner (R-Ohio), has accused Democrats of undermining innovation if they don't act before Nov. 1, when the current moratorium expires.

"Democrats face a choice: will they protect millions of consumers and small businesses from a massive, abrupt tax increase?" Boehner wrote today in an op-ed on the business news Web site TCS Daily.

The reality, though, is that abrupt taxation of the Internet is highly unlikely when the moratorium expires. In fact, the Republican Congress in 2003 allowed the Internet tax ban to lapse due to gridlock in the Senate, and it remained expired for an entire year. When a bill finally passed in 2004, the ban was put back into place and nobody taxed the Internet during that year-long lapse.

"It's 'the sky is falling' lobbying," said David Quam, director of federal relations for the National Governors Association. "States aren't waiting at the door [to impose a tax]. ... The Internet won't fail, and nobody's going to rush out and tax the Internet."