‘‘(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 agen-
cy 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 man-
ner 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 
tax on telecommunications service purchased, 
used, or sold by a provider of Internet access. 
‘‘(3) NO INFERENCE.—No inference of legisla-
tive 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 November 1, 2007, with re-
spect to any tax subject to the exceptions described 
in subparagraphs (A) and (B) of paragraph (2).’’. 
SEC. 4. DEFINITION. 
Section 1105 of the Internet Tax Freedom Act (47 
U.S.C. 151 note) is amended— 
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(1) in paragraph (1) by striking ‘‘services’’, 
(2) by amending paragraph (5) to read as fol-
lows: 
‘‘(5) INTERNET
ACCESS.—The term ‘Internet 
access’— 
‘‘(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 ac-
cess content, information or other services 
offered over the Internet; 
‘‘(C) includes services that are incidental 
to the provision of the service described in sub-
paragraph (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 
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messaging), video clips, and personal electronic 
storage capacity; and 
‘‘(D) does not include voice, audio or video 
programming, or other products and services 
(except services described in subparagraph (A), 
(B), or (C)) 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), 
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 Commu-
nications 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 
includes communications services (as defined in sec-
tion 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: 
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‘‘(C) SPECIFIC EXCEPTION.—Effective No-
vember 1, 2007, the term ‘tax on Internet ac-
cess’ also does not include a State tax that— 
‘‘(i) is imposed on at least 80 percent 
of business enterprises engaged in business 
in the State without regard to— 
‘‘(I) the form of organization; 
‘‘(II) business activity in which 
such enterprise is engaged; 
‘‘(III) minimum filing thresholds; 
‘‘(IV) whether such business ac-
tually incurs a filing and payment ob-
ligation; and 
‘‘(ii) was enacted between June 30, 
2005, and November 1, 2007, to replace, 
in whole or in part, a tax that, pursuant 
to section 1105(10)(B) or a modified 
value-added tax, is not a tax on Internet 
access.’’. 
SEC. 5. CONFORMING AMENDMENTS. 
Section 1106 of the Internet Tax Freedom Act (47 
U.S.C. 151 note) is amended— 
(1) in subsection (b)(2)— 
(A) in the heading by striking ‘‘SERVICES’’, 
and 
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(B) by striking ‘‘such services’’ and insert-
ing ‘‘such telecommunications’’, and 
(2) by striking ‘‘services’’ each place it appears. 
SEC. 6. EFFECT ON OTHER LAWS. 
Section 1107 of the Internet Tax Freedom Act (47 
U.S.C. 151 note) is amended by adding at the end the 
following: 
‘‘(d) CERTAIN TAXES ON INTERNET ACCESS.—No 
State shall prohibit a provider of Internet access from— 
‘‘(1) collecting from customers, directly or indi-
rectly, the amount of any tax described in section 
1105(10)(C) that is imposed on Internet access reve-
nues; or 
‘‘(2) separately stating the amount of such tax 
on customer bills.’’. 
SEC. 7. RULE OF CONSTRUCTION. 
Section 1108 of the Internet Tax Freedom Act (47 
U.S.C. 151 note) is amended by striking section 1108. 
Æ 
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