FRAMINGHAM (09/26/2003) - Legislation intended to ban taxes unique to the Internet could end up exempting many telecommunications services from state and local taxes, costing states billions of dollars a year, according to a group representing 45 state governments. The Internet Tax Nondiscrimination Act, which passed the U.S. House of Representatives Sept. 17, was amended to define Internet access. The bill's authors intend to exempt Internet access from taxes, as well as telecom services offered over the Internet, which would include the growing trend of offering voice telephone services through packet switching technology, according to the Multistate Tax Commission. The Internet Tax Nondiscrimination Act, which has not yet passed the Senate, would permanently replace a moratorium on Internet-only taxes that has been in place since 1998. The MTC released a study this week that said the bill could cause state and local governments to collectively lose between US$4 billion and $8.75 billion a year by 2006, rather than the $500 million projected when the bill was originally introduced.