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To: gladman who wrote (120464)	3/15/2001 10:27:54 AM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

U.S. To Extend Internet Tax Ban - For Now Send this Article Print this Article Related Stories Talkback By Rebecca Sausner www.NewsFactor.com, Part of the NewsFactor Network March 14, 2001 At least for now, Congress seems likely to extend the Internet tax ban. But in the long run, states will want to collect the estimated $500 million in sales taxes currently being passed over. In This Story: Permanent Access Tax Ban No Ban On Net Sales Tax Eventual Sales Tax Likely Missed Revenue Related StoriesConsumers worried about Internet taxes can continue to breathe easy -- at least, for now. The Internet Tax Freedom Act expires in about six months, but the U.S. Congress appears ready to extend it. The Senate is currently considering three Internet tax-related bills. The one with the broadest bipartisan support would extend the Internet Tax Freedom Act until the end of 2005. That measure was introduced last week by Senator Byron Dorgan (D-North Dakota) and was co-sponsored by 10 other senators. However, though the tangled web that is the Internet sales tax debate will not be resolved any time soon, the eventual imposition of sales tax on Internet purchases seems likely. Permanent Access Tax Ban A second measure, proposed by Senator Ron Wyden (D-Oregon), would extend the ban on some Internet taxes until the end of 2006 and permanently ban taxes on Internet access. A bill similar to Wyden's passed the House last year by a significant margin, but his bill did not make the cut in the Senate, Carol Guthrie, a press aide to Senator Wyden, told NewsFactor Network. A third measure, proposed by Senator Bob Smith (R-New Hampshire), would make the federal ban on Internet taxes permanent and would not allow states to impose sales taxes on citizens of other states. No Ban On Net Sales Tax This would, in effect, preclude sales taxes on Internet purchases, an aide to Senator Smith told NewsFactor. All three bills have been referred to committees. However, while the Dorgan bill was referred to the powerful Finance Committee, the other two were referred to the Committee on Commerce, Science and Transportation. Contrary to popular belief, the Internet Tax Freedom Act, which was passed in 1998, does not ban sales tax on goods sold online. Rather, it precludes taxes on Internet access; duplicate taxes on transactions that two or more states could tax; and discriminatory taxes that would tax specific products online that are not taxed offline. Eventual Sales Tax Likely For practical purposes, no one has figured out an easy way to collect sales tax on goods sold online by a company in one state to a consumer in another. The Dorgan bill would have Congress help states collect taxes from e-tailers only after state and local governments collectively work to simplify the task. Under current laws, if all states and local governments mandated that online retailers collect the appropriate sales taxes, e-tailers would have to learn the rules in more than 7,000 tax locations. Similarly, the Wyden bill urges states to streamline their tax rates. Missed Revenue A variety of state, county and municipal government associations, including The National Conference of State Legislatures and the National Governors Association, support the Dorgan bill, which would eventually pave the way for the collection of sales taxes on the Internet. They have a vested interest in the measure. Forrester Research estimates that local governments missed out on more than US$500 million in tax payments in 1999 because no effective way of charging sales tax on Internet purchases currently exists. ecommercetimes.com