Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: H James Morris who wrote (92773)	2/2/2000 12:38:00 AM
From: gladman	Respond to of 164684

Internut Taxes? Do you think Al Gore buys broom handles online? >>February 2, 2000 Internet-Tax Panel Will Focus On Extending Ban for Years By GLENN R. SIMPSON Staff Reporter of THE WALL STREET JOURNAL WASHINGTON -- Members of a badly divided federal commission on Internet-tax issues have begun to focus on a long-term extension of the current moratorium on new Internet taxes as one measure most of them can agree to recommend. A multiyear moratorium is the centerpiece of a new compromise effort being floated by six companies with representatives on the commission. During the hiatus, state governments would be charged with simplifying their tax structures in exchange for enhanced power to tax interstate commerce conducted on the Web. Internet Panel Pushes for Sales-Tax Reform (Dec. 16, 1999) Members of Net-Tax Roundtable Urge Congress to Delay Deadline (Dec. 14, 1999) Several parts of the new proposal are contentious, and a number of people involved in the debate on both sides of the issue said they doubt it would be a successful compromise vehicle. Virginia Gov. James Gilmore, chairman of the commission, "has not found any consensus" favoring the compromise, spokesman Mark Miner said, "and doesn't believe that this policy represents a fixed or final position by the business leaders." The moratorium, however, seems to have broad appeal. Advocates for the states say extending the moratorium would give states time to find ways to tax many transactions under existing law, while opponents of taxing Internet commerce are fairly content to let them try. The current moratorium expires in October 2001. Proposal Came From Academics Commissioner Grover Norquist, a leader of the antitax forces, said he prefers a permanent ban on new Internet-tax measures but might settle for a three- to five-year moratorium, "because the number of Net users grows every year, and that strengthens the antitax position." The broad outlines of the nascent compromise proposal, which is being pushed by representatives for America Online Inc., MCI WorldCom Inc., Charles Schwab Corp., AT&T Corp., Time Warner Inc. and Gateway Inc., follow a proposed solution that emerged in December at a meeting of the commission in San Francisco. A group of academics proposed that state and local governments, in exchange for agreeing to enact radical simplification of highly complex local consumption taxes, would obtain authority to collect such levies on interstate commerce. Currently, states have difficulty collecting such taxes unless the retailer selling the product has a facility located in the same state where the buyer is. That is because of a 1992 Supreme Court decision holding that it was an "unreasonable" burden on interstate commerce for states to force out-of-state retailers to collect the fees unless they already have a substantial physical presence in the state. Some advocates for the states think merely simplifying their tax laws would meet the court's "reasonable" standard. In addition, they believe that restructuring in the electronic-commerce industry will cause most retailers to have a physical presence in many states anyway, allowing states to capture more revenue. The moratorium, according to the argument of several state advocates who declined to speak for the record, would allow this process to proceed. Consensus Package Likely Details of the compromise proposal are likely to emerge next week when it is presented more widely; the commission will try to decide on its recommendations to Congress at a meeting next month in Dallas. The proposed moratorium extension, or a grander compromise, would likely be packaged with several recommendations around which there is increasing consensus: a permanent ban on taxing Internet access and removal of the federal excise tax on telecommunications. Even the moratorium has critics. Brookings Institution economist Henry Aaron, who, like most academics, supports empowering states to collect the taxes, says he opposes the moratorium for the same reason Mr. Norquist supports it. "What is now a fledgling industry could become more powerful, and lo and behold, in five years they could muscle more time, making it indefinite."<<