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 
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 Non-
discrimination 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 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. 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 
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 
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: 
‘‘(C) SPECIFIC EXCEPTION.— 
‘‘(i) 
SPECIFIED
TAXES.—Effective 
November 1, 2007, the term ‘tax on Inter-
net access’ also does not include a State 
tax expressly levied on commercial activity, 
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 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); 
‘‘(III) is imposed on a broad 
range of business activity; and 
‘‘(IV) is not discriminatory in its 
application to providers of commu-
nication 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 ap-
plication 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 Inter-
net Tax Freedom Act (47 U.S.C. 151 note) is amended— 
(1) by striking ‘‘telecommunications services’’ 
each place it appears and inserting ‘‘telecommuni-
cations’’, and 
(2) in subsection (b)(2)— 
(A) in the heading by striking ‘‘SERVICES’’, 
(B) by striking ‘‘such services’’ and insert-
ing ‘‘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. 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). 
Passed the House of Representatives October 16, 
2007. 
Attest: 
Clerk.
110TH CONGRESS 
1ST SESSION 
H. R. 3678 
AN ACT 
To amend the Internet Tax Freedom Act to extend 
the moratorium on certain taxes relating to the 
Internet and to electronic commerce.