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Tax bill amendment encourages parents to buy PCs

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By Margret Johnston

(IDG) -- An amendment added to the U.S. Senate version of the $1.35 trillion tax bill would expand an existing tax deduction to give parents an additional incentive to buy PCs, computer equipment, Internet access and educational software.

The amendment, which was added to the tax legislation before it passed the Senate on 62-38 vote on Wednesday, would expand the existing Education Savings Account (ESA) program. Money deposited in ESAs qualifies as an income tax deduction, but currently annual contributions to ESAs are capped at $500, and the money can be used only to cover expenses related to college education.

The amendment would expand the annual contribution to ESAs to $2,000 and broaden the deduction to cover the purchase of computers, related equipment, education software and Internet access. It also would expand the program beyond college students to include children in primary and secondary school.

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Senator George Allen, a Republican from Virginia, sponsored the amendment. The bill is on the agenda of a House-Senate Conference Committee, which met last Friday to consider both the Senate and the House versions of the bill before sending it to President George W. Bush. The House version of the bill does not include the amendment. The Conference Committee is expected to send the bill to Bush in time for it to be signed this week.

The intent of the amendment is to empower parents to make decisions on what their children need for school and to help bridge the digital divide, said Carrie Cantrell, a spokeswoman for Allen. Cantrell did not know whether the White House would agree to the amendment.

Mike Wendy, a spokesman for the Computing Technology Industry Association, said the amendment has a good chance of remaining part of the bill as it moves through the Conference Committee.








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