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Holding its final meeting today in Dallas, Texas, the
Commission on Electronic Commerce, which has been sharply divided on
whether to recommend Congress approve an Internet sales tax, is just one
vote short of the two-thirds majority needed to advise banning Internet
taxes for the next five years.
The compromise measure, if approved by Congress, would extend the
current moratorium placed on Internet taxes for five more years and
permanently ban all transaction taxes and taxes on Internet access.
“This is definitely a no-new-taxes-on-the-Internet proposal, but it’s
not a no-sales-taxes-ever proposal,” Commission member David Pottruck,
president of Charles Schwab Corp., told the Associated Press. “It’s a
The commission includes top executives of American Online, AT&T, Time
Wrapping up its work in a final meeting today, the commission plans
to make recommendations to Congress by April 21.The commission could
reach a two-thirds majority in last-minute negotiations and vote to
recommend the five-year moratorium extension, or it could endorse any
one of several other positions on Internet sales taxes.
In yesterday’s vote, the six business members supported the panel’s
chairman, Gov. Jim Gilmore, R-Va., and others who have strongly argued
against taxing the Net throughout the panel’s 10-month life.
On the other hand, all three Clinton administration panel members
abstained on the proposal, along with Govs. Gary Locke, D-Wash., and
Mike Leavitt, R-Utah, and other government officials. Dallas Mayor Ron
Kirk, a Democrat — who had called the prospect of losing the fight for
e-taxes “a huge money grab for the business members of this commission”
cast the lone vote against the compromise. The final vote was 11 in
favor, one against, with seven members abstaining.
The compromise proposal also clarifies “nexus” — referring to the
presence of a business in any given state that determines whether taxes
must be collected for purchases made in that state. Factors such as
customer location or a business’s use of an Internet Service Provider or
telecommunications services in a state would not be used to determine
In addition, the proposal would set up a new advisory commission to
oversee the creation of uniform sales tax laws in each state.
In a letter to President Clinton, Commissioner Dean Andal, a member of
California’s elected Board of Equalization, expressed his support for
the compromise and urged Clinton to promote the proposal.
“The proposal balances the national interest in a tax policy that
promotes expansion of the Internet and electronic commerce with the
legitimate need for state and local government to obtain the resources
to provide needed services,” Andal wrote.
He continued, “[The Commission has] been given the clear signal that,
as things currently stand, the administration will not support any
proposal that does not recommend that Congress allow the States to
mandate the collection of sales taxes on electronic commerce. Such a
position, if implemented, would amount to the largest consumer tax
increase in history.
“At a time when state and federal tax coffers are overflowing, and
when the vast majority of Americans are opposed to such taxes,” he
asked, “is such a suggestion good public policy?”
WorldNetDaily’s readers don’t seem to think so. WND’s “Don’t Tax
the Net!” petition
has garnered more than 30,000 signatures from Americans who are urging
their elected representatives in local, state and federal government to
“keep the Web free.”
The short petition states:
“Whereas, the Internet has resulted in the freest exchange of ideas,
information, goods and services among the peoples of the world in
“We, the People, do hereby Petition our elected representatives to
preserve Internet freedom and, do hereby oppose all attempts to tax or
otherwise regulate Internet commerce.”
WND will be sending its “Don’t Tax the Net!” petition to
the Commission, whose recommendations to Congress are due next month,
and will also send copies to members of Congress.
Read Joseph Farah’s column:
Clinton ready to tax the Net
See Joseph Farah’s columns: