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To: Jeffery E. Forrest who wrote (8548)	11/4/1997 4:13:00 PM
From: Moonray	Respond to of 22053

U.S. Senate Committee Approves Moratorium on New Internet Taxes Washington, Nov. 4 (Bloomberg) -- The Senate Commerce Committee voted 15-4 to approve a seven-year moratorium on state and local Internet taxes. Representatives of the computer industry have been urging lawmakers to consider the threat that new taxes pose to the development of the Internet. Local officials, however, have argued that the legislation could bar them from a legitimate source of tax revenue. While the panel gave lopsided approval to the moratorium today, members said they still had to work out a host of problems before the full Senate could vote on the measure. ''I'll vote to get the bill to the floor,'' said Sen. Ted Stevens, a Republican of Alaska. ''But we still have a way to go.'' Similar legislation is moving through the House, but it's very unlikely the two chambers will settle on a final version before they adjourn for the year later this month. The bill would establish a moratorium until 2004 on the imposition of state and local taxes on Internet access services, online services and all communications and transactions using the Internet. The panel approved a set of changes offered by Committee Chairman Sen. John McCain, which listed the existing state and local taxes governments could continue to charge under the bill. The list includes property taxes, business license taxes, sales taxes and gross or net income taxes. ''This means if a state has a 3 percent sales tax that a customer must pay the state when walking into a store and purchasing a product, the Internet must charge exactly the same tax,'' said Sen. Ron Wyden, Democrat of Oregon. Internet service providers say they want the moratorium bill because they're concerned that local governments will impose a ''mish-mash'' of new levies on their business if Congress doesn't act, stunting the development of the electronic highway as a marketplace, according to The Computer and Communications Industry Association. The bill, however, has met significant opposition from state governors, who argue that much of the Internet commerce would be exempted from local taxation because the Internet's barrier-free qualities would make tax jurisdiction difficult to pinpoint. ''The small corner hardware or clothing stores in towns across America will not be able to compete with businesses selling tax-free goods on the Internet,'' said National Governor's Association chairman George Voinovich in prepared remarks. o~~~ O