FC: Senate extends Net-tax moratorium for two years

[Declan McCullagh <declan () well com>]

---

Date: Thu, 15 Nov 2001 19:43:38 -0500
Subject: Senate Extends Moratorium on Internet-Access Taxes
From: Matt_Raymond () allen senate gov (Matt Raymond)

The U.S. Senate tonight on a voice vote extended the moratorium on
Internet-access taxes, and taxes that discriminate against the Internet, by two
years.  The moratorium had expired on Oct. 21, 2001. The bill, which passed 
the House last month, now moves on to the White House for
the President's signature.  The President is expected to sign the bill,
according to a recent Statement of Administration Policy. Senator George 
Allen (R-VA) has been a vocal proponent of a "clean" extension of
the moratorium.  He also was a chief opponent of a controversial amendment to
create new Internet taxes and to compel retailers outside the boundaries of a
State or locality to collect and remit sales taxes to that political entity.
That amendment failed on a vote of 43-57. Earlier today he also announced 
the endorsement of the clean two-year extension
by the Senate Republican High Tech Task Force, which he chairs. On the 
Senate floor this evening, Senator Allen said: "The reality is if we pass 
this amendment, the substitute imposes Internet
access taxes and allows discriminatory taxes on the Internet. … This does
complicate the tax code. It is a very complex issue, which actually makes it
worse. There are unfair taxes that could occur even within a State if this were
adopted and, indeed, has added taxes. "Now, if we allow this amendment to 
be put on, let's make no doubt about it, the
House is not going to conference; we will have this expired moratorium
continuing. There are already States that have access taxes that are
grandfathered. These are taxes like the Spanish-American War tax that was 
put on
for telephone service, a "luxury."  Once a tax is put on by a State or 
locality,
it is very hard to get them off. … "Our side, the opponents of this 
amendment, side with individuals. We side with
entrepreneurs, rather than siding with the tax collectors. "Now, we have 
heard here that this is a loophole. The fact that someone who has
no physical presence in a state gets no benefits from fire or police services,
that they do not have to collect and remit sales and use taxes to 7,600
jurisdictions, that that's not a level playing field or it is a loophole.  I
look at the Internet as an individualized enterprise zone where the consumer,
the individual, the human being is the one making the decisions, not
tax-collecting bureaucracies. … "While this is all very well-intentioned, 
the solution is not burdening the free
enterprise system. The solution is not harming the Internet and the 
capabilities
and potential and possibilities of the Internet for education, 
communication and
commerce. And indeed what is being tried here with the Enzi-Dorgan amendment is
to abrogate and negate a settled constitutional law from court decisions,
whether it was the Quill decision or Bella Hess decision that says there can't
be taxation without representation. "I would like to work with the 
proponents of this amendment to find a system
where the folks who care about local schools, as Senator Dorgan stated, can pay
those use taxes. But I am going to stand on the side of freedom, freedom of the
Internet, trusting individuals and entrepreneurs, not on the side of making 
this
advancement in technology easier to tax for the tax collectors."

---

NEWS FROM . . . U.S. REP. CHRISTOPHER COX
        CALIFORNIA              <http://cox.house.gov>http://cox.house.gov

Internet Tax Moratorium Extended

Senate Finally Acts to Renew Ban on Discriminatory Taxes

        WASHINGTON (Thursday, November 15, 2001)-Today, the Senate 
approved House Policy Chairman Cox's Internet Non-Discrimination Act (H.R. 
1552), a two-year extension of the existing Cox-Wyden moratorium on new, 
special, and discriminatory Internet taxes that was enacted in 1998.

        "This is wonderful news," said a much-relieved Chairman 
Cox.  "Senator Wyden deserves a gold medal for his resolve to pass this 
bill.  His commitment to disarming the tax collectors who target the 
Internet for discriminatory tax treatment is heroic."

        Last April, Vice President Cheney called on Congress to extend the 
Internet tax moratorium, and to enact a permanent ban on all Internet 
access taxes before the year was out.  H.R. 1552 extends the moratorium on 
multiple and discriminatory taxes, and bans access taxes for two more 
years.  The legislation also extends the "Sense of the Congress" resolution 
that there should be no federal taxes on Internet access or electronic 
commerce, and that the United States work aggressively through the EU and 
WTO to keep electronic commerce free from tariffs and discriminatory taxes.

        "Although I would have preferred to honor Vice President Cheney's 
wishes that access taxes be banned permanently, this is a fair compromise," 
said Chairman Cox.  "The bottom line is that consumers know that for the 
next two years, the Internet will not be singled out for unfair tax treatment."

#   #   #

Contact: Fraser Traverse
(202) 225-5611

---




-------------------------------------------------------------------------
POLITECH -- Declan McCullagh's politics and technology mailing list
You may redistribute this message freely if you include this notice.
Declan McCullagh's photographs are at http://www.mccullagh.org/
To subscribe to Politech: http://www.politechbot.com/info/subscribe.html
This message is archived at http://www.politechbot.com/
-------------------------------------------------------------------------