PUBLIC LAW 110–108—OCT. 31, 2007 

INTERNET TAX FREEDOM ACT AMENDMENTS 

ACT OF 2007 

121 STAT. 1024 PUBLIC LAW 110–108—OCT. 31, 2007 

Public Law 110–108 

110th Congress 

An Act 

To amend the Internet Tax Freedom Act to extend the moratorium on certain 

taxes relating to the Internet and to electronic commerce. 

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Internet Tax Freedom Act Amendments Act of 2007’’. 

SEC. 2. MORATORIUM. 

The Internet Tax Freedom Act (47 U.S.C. 151 note) is 

amended— 

(1) in section 1101(a) by striking ‘‘2007’’ and inserting 

‘‘2014’’, and 

(2) in section 1104(a)(2)(A) by striking ‘‘2007’’ and inserting 

‘‘2014’’. 

SEC. 3. GRANDFATHERING OF STATES THAT TAX INTERNET ACCESS. 

Section 1104 of the Internet Tax Freedom Act (47 U.S.C. 151 

note) is amended by adding at the end the following: 

‘‘(c) APPLICATION OF DEFINITION.— 

‘‘(1) IN GENERAL.—Effective as of November 1, 2003— 

‘‘(A) for purposes of subsection (a), the term ‘Internet 

access’ shall have the meaning given such term by section 

1104(5) of this Act, as enacted on October 21, 1998; and 

‘‘(B) for purposes of subsection (b), the term ‘Internet 

access’ shall have the meaning given such term by section 

1104(5) of this Act as enacted on October 21, 1998, and 

amended by section 2(c) of the Internet Tax Nondiscrimination Act (Public Law 108–435). 

‘‘(2) EXCEPTIONS.—Paragraph (1) shall not apply until June 

30, 2008, to a tax on Internet access that is— 

‘‘(A) generally imposed and actually enforced on telecommunications service purchased, used, or sold by a provider of Internet access, but only if the appropriate 

administrative agency of a State or political subdivision 

thereof issued a public ruling prior to July 1, 2007, that 

applied such tax to such service in a manner that is inconsistent with paragraph (1); or 

‘‘(B) the subject of litigation instituted in a judicial 

court of competent jurisdiction prior to July 1, 2007, in 

which a State or political subdivision is seeking to enforce, 

in a manner that is inconsistent with paragraph (1), such 

Applicability. 

Effective date. 

Internet Tax 

Freedom Act 

Amendments Act 

of 2007. 

Communications 

and telecommunications. 

47 USC 609 note. 

Oct. 31, 2007 

[H.R. 3678] 

PUBLIC LAW 110–108—OCT. 31, 2007 121 STAT. 1025 

tax on telecommunications service purchased, used, or sold 

by a provider of Internet access. 

‘‘(3) NO INFERENCE.—No inference of legislative construction shall be drawn from this subsection or the amendments 

to section 1105(5) made by the Internet Tax Freedom Act 

Amendments Act of 2007 for any period prior to June 30, 

2008, with respect to any tax subject to the exceptions described 

in subparagraphs (A) and (B) of paragraph (2).’’. 

SEC. 4. DEFINITIONS. 

Section 1105 of the Internet Tax Freedom Act (47 U.S.C. 151 

note) is amended— 

(1) in paragraph (1) by striking ‘‘services’’, 

(2) by amending paragraph (5) to read as follows: 

‘‘(5) INTERNET ACCESS.—The term ‘Internet access’— 

‘‘(A) means a service that enables users to connect 

to the Internet to access content, information, or other 

services offered over the Internet; 

‘‘(B) includes the purchase, use or sale of telecommunications by a provider of a service described in subparagraph 

(A) to the extent such telecommunications are purchased, 

used or sold— 

‘‘(i) to provide such service; or 

‘‘(ii) to otherwise enable users to access content, 

information or other services offered over the Internet; 

‘‘(C) includes services that are incidental to the provision of the service described in subparagraph (A) when 

furnished to users as part of such service, such as a home 

page, electronic mail and instant messaging (including 

voice- and video-capable electronic mail and instant messaging), video clips, and personal electronic storage 

capacity; 

‘‘(D) does not include voice, audio or video programming, or other products and services (except services 

described in subparagraph (A), (B), (C), or (E)) that utilize 

Internet protocol or any successor protocol and for which 

there is a charge, regardless of whether such charge is 

separately stated or aggregated with the charge for services 

described in subparagraph (A), (B), (C), or (E); and 

‘‘(E) includes a homepage, electronic mail and instant 

messaging (including voice- and video-capable electronic 

mail and instant messaging), video clips, and personal electronic storage capacity, that are provided independently 

or not packaged with Internet access.’’; 

(3) by amending paragraph (9) to read as follows: 

‘‘(9) TELECOMMUNICATIONS.—The term ‘telecommunications’ means ‘telecommunications’ as such term is defined 

in section 3(43) of the Communications Act of 1934 (47 U.S.C. 

153(43)) and ‘telecommunications service’ as such term is 

defined in section 3(46) of such Act (47 U.S.C. 153(46)), and 

includes communications services (as defined in section 4251 

of the Internal Revenue Code of 1986 (26 U.S.C. 4251)).’’, and 

(4) in paragraph (10) by adding at the end the following: 

‘‘(C) SPECIFIC EXCEPTION.— 

‘‘(i) SPECIFIED TAXES.—Effective November 1, 2007, 

the term ‘tax on Internet access’ also does not include 

a State tax expressly levied on commercial activity, 

Effective date. 

121 STAT. 1026 PUBLIC LAW 110–108—OCT. 31, 2007 

modified gross receipts, taxable margin, or gross 

income of the business, by a State law specifically 

using one of the foregoing terms, that— 

‘‘(I) was enacted after June 20, 2005, and 

before November 1, 2007 (or, in the case of a 

State business and occupation tax, was enacted 

after January 1, 1932, and before January 1, 1936); 

‘‘(II) replaced, in whole or in part, a modified 

value-added tax or a tax levied upon or measured 

by net income, capital stock, or net worth (or, 

is a State business and occupation tax that was 

enacted after January 1, 1932 and before January 

1, 1936); 

‘‘(III) is imposed on a broad range of business 

activity; and 

‘‘(IV) is not discriminatory in its application 

to providers of communication services, Internet 

access, or telecommunications. 

‘‘(ii) MODIFICATIONS.—Nothing in this subparagraph shall be construed as a limitation on a State’s 

ability to make modifications to a tax covered by clause 

(i) of this subparagraph after November 1, 2007, as 

long as the modifications do not substantially narrow 

the range of business activities on which the tax is 

imposed or otherwise disqualify the tax under clause 

(i). 

‘‘(iii) NO INFERENCE.—No inference of legislative 

construction shall be drawn from this subparagraph 

regarding the application of subparagraph (A) or (B) 

to any tax described in clause (i) for periods prior 

to November 1, 2007.’’. 

SEC. 5. CONFORMING AMENDMENTS. 

(a) ACCOUNTING RULE.—Section 1106 of the Internet Tax 

Freedom Act (47 U.S.C. 151 note) is amended— 

(1) by striking ‘‘telecommunications services’’ each place 

it appears and inserting ‘‘telecommunications’’, and 

(2) in subsection (b)(2)— 

(A) in the heading by striking ‘‘SERVICES’’, 

(B) by striking ‘‘such services’’ and inserting ‘‘such 

telecommunications’’, and 

(C) by inserting before the period at the end the following: ‘‘or to otherwise enable users to access content, 

information or other services offered over the Internet’’. 

(b) VOICE SERVICES.—The Internet Tax Freedom Act (47 U.S.C. 

151 note) is amended by striking section 1108. 

SEC. 6. SUNSET OF GRANDFATHER PROVISIONS. 

Section 1104(a) of the Internet Tax Freedom Act is amended 

by adding at the end thereof the following: 

‘‘(3) EXCEPTION.—Paragraphs (1) and (2) shall not apply 

to any State that has, more than 24 months prior to the 

date of enactment of this paragraph, enacted legislation to 

repeal the State’s taxes on Internet access or issued a rule 

or other proclamation made by the appropriate agency of the 

State that such State agency has decided to no longer apply 

such tax to Internet access.’’. 

47 USC 151 note. 

PUBLIC LAW 110–108—OCT. 31, 2007 121 STAT. 1027 

LEGISLATIVE HISTORY—H.R. 3678 (S. 2128): 

HOUSE REPORTS: No. 110–372 (Comm. on the Judiciary). 

CONGRESSIONAL RECORD, Vol. 153 (2007): 

Oct. 16, considered and passed House. 

Oct. 25, considered and passed Senate, amended. 

Oct. 30, House concurred in Senate amendment. 

Æ 

SEC. 7. EFFECTIVE DATE. 

This Act, and the amendments made by this Act, shall take 

effect on November 1, 2007, and shall apply with respect to taxes 

in effect as of such date or thereafter enacted, except as provided 

in section 1104 of the Internet Tax Freedom Act (47 U.S.C. 151 

note). 

Approved October 31, 2007. 

47 USC 151 note.