another boost in the arm for e-commerce.
Monday December 14 1:27 AM ET
Calif. E-Commerce Board Proposes Permanent Internet Tax Ban
By Andrea Orr
PALO ALTO, Calif. (Reuters) - An electronic commerce committee formed by California Governor Pete Wilson will Monday recommend a new set of Internet-friendly tax initiatives including a permanent ban on new taxes on online transactions and some cuts in existing taxes, sources say.
The proposals are likely to intensify the nationwide debate over the role state and federal governments play in promoting businesses on the Internet versus preserving those on Main Street. Although the recommendations being presented Monday relate mainly to California state tax policies, they could have a nationwide impact because this state is home to so many big Internet companies.
California earlier this year passed a three-year moratorium on Internet taxes, but that measure was presented as an interim way to support the electronic commerce industry in its infancy. A permanent ban could be far more controversial, since it would eventually apply to businesses that are established and even flourishing.
Along with the ban on new taxes, the committee will recommend tax reductions on certain goods that can be purchased and delivered electronically. A draft of the proposal suggests that ''electronic delivery of software, music and other similar goods'' be given the highest priority with regards to these tax cuts.
The e-commerce committee, which was formed last spring, consists of many of the most powerful players in the fast-growing e-commerce industry including, George Bell, President of the Internet portal Excite Inc (Nasdaq:XCIT - news), Roberta Katz, senior vice president of Netscape Communications Corp (Nasdaq:NSCP - news), and John Place, general counsel for Yahoo! Inc .
Although Governor Wilson has not officially backed all of their specific recommendations, he has repeatedly spoken of the need for policies that would not inhibit a fledgling industry that has enormous potential. The Internet is already one of the most successful industries in California, generating thousands of jobs and a general affluence in many areas around Silicon Valley.
Wilson, who leaves office early next year, will pass on the recommendations to his successor, Gray Davis.
Also included in the committee's proposal are some suggestions for how the complex matter of taxing intrastate Internet commerce
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