IB 
Union Calendar No. 230 
110TH CONGRESS 
1ST SESSION H. R. 3678 
[Report No. 110–372] 
To amend the Internet Tax Freedom Act to extend the moratorium on 
certain taxes relating to the Internet and to electronic commerce. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 27, 2007 
Mr. CONYERS (for himself, Ms. LINDA T. SA´NCHEZ of California, Mr. CAN-
NON, Mr. BOUCHER, Mr. WATT, Mr. ISSA, and Mr. SENSENBRENNER) 
introduced the following bill; which was referred to the Committee on the 
Judiciary 
OCTOBER 12, 2007 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on September 27, 2007] 
A BILL 
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 Representa-
tives of the United States of America in Congress assembled, 
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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 ‘‘2011’’, and 
(2) in section 1104(a)(2)(A) by striking ‘‘2007’’ 
and inserting ‘‘2011’’. 
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 fol-
lowing: 
‘‘(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 en-
acted 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 en-
acted on October 21, 1998, and amended by sec-
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tion 2(c) of the Internet Tax Nondiscrimination 
Act (Public Law 108–435). 
‘‘(2) EXCEPTIONS.—Paragraph (1) shall not 
apply until November 1, 2007, to a tax on Internet 
access that is— 
‘‘(A) generally imposed and actually en-
forced 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 in-
consistent 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 sub-
division is seeking to enforce, in a manner that 
is inconsistent with paragraph (1), such 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 Inter-
net Tax Freedom Act Amendments Act of 2007 for 
any period prior to November 1, 2007, with respect 
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to any tax subject to the exceptions described in sub-
paragraphs (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 fol-
lows: 
‘‘(5) INTERNET ACCESS.—The term ‘Internet ac-
cess’— 
‘‘(A) means a service that enables users to 
connect to the Internet to access content, infor-
mation, or other services offered over the Inter-
net; 
‘‘(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 subpara-
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graph (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; and 
‘‘(D) does not include voice, audio or video 
programming, or other products and services (ex-
cept services described in subparagraph (A), (B), 
or (C)) that utilize Internet protocol or any suc-
cessor 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), or (C).’’, 
(3) by amending paragraph (9) to read as fol-
lows: 
‘‘(9) TELECOMMUNICATIONS.—The term ‘tele-
communications’ means ‘telecommunications’ as such 
term is defined in section 3(43) of the Communica-
tions Act of 1934 (47 U.S.C. 153(43)) and ‘tele-
communications service’ as such term is defined in 
section 3(46) of such Act (47 U.S.C. 153(46)), and in-
cludes communications services (as defined in section 
4251 of the Internal Revenue Code of 1986 (26 U.S.C. 
4251)).’’, and 
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(4) in paragraph (10) by adding at the end the 
following: 
‘‘(C) SPECIFIC EXCEPTION.— 
‘‘(i) SPECIFIED TAXES.—Effective No-
vember 1, 2007, the term ‘tax on Internet 
access’ also does not include a State tax ex-
pressly levied on commercial activity, modi-
fied gross receipts, taxable margin, or gross 
income of the business, by a State law spe-
cifically 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 oc-
cupation tax, was enacted after Janu-
ary 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 in-
come, 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); 
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