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Technology Stocks : Voice-on-the-net (VON), VoIP, Internet (IP) Telephony -- Ignore unavailable to you. Want to Upgrade?

To: SteveG who wrote (434)	4/14/1998 10:59:00 AM
From: Frank A. Coluccio	Read Replies (1) \| Respond to of 3178

SteveG, Seen this? --------- Support the Internet Tax Freedom Act April 14, 1998 The Internet is shifting global power. It is reshaping governments, education systems, livelihoods and lifestyles. Today's children will never know a world without it. Governors want the Internet to grow uninhibited into the economic force it promises to become. The 20th-century marketplace of consumer-to-merchant transactions is giving way to the 21st-century model, in which the merchant comes to the consumer online. With the Internet emerging as a new way to do business, our system of taxation has to change as well. The governors were the first to recognize the ramifications of Internet growth on the ability of governments to provide services such as education. The governors then presented an equitable solution to Congress. The result is a revised Internet Tax Freedom Act that would put new Internet taxes on hold for at least three years while a commission develops a uniform taxation policy. Electronic commerce is the future, but its formative years are now. The 'net must advance with unfettered access. That's why the governors support a national moratorium on any new federal, state or local taxes on access, bit volume or bandwidth capacity. We also have to clear a speed bump on the information superhighway: the current haphazard tax structure, which is unworkable for electronic commerce. Last year, $8 billion in commerce was conducted online. That figure is estimated to be near $350 billion by 2002. Now, 30,000 jurisdictions across the U.S. have authority to impose sales taxes. They can't require sellers to collect it, however, unless the jurisdictions can demonstrate "nexus" -- physical presence of that business within their boundaries. With the amorphous Internet, few can. As more commerce shifts from the neighborhood vendor to the electronic storefront, what happens to the sales tax that funds half of all services provided to citizens in most states? Who takes up the slack? We all do. Giving a tax break to online purchases would only create a loophole that ultimately will be paid by everyone -- at the grocery store, on the mortgage payment and at income tax time. Or maybe the federal government would come to the rescue with a national sales tax administered by the IRS. Now a solution is on the table. The governors' proposal is a new system of commerce that eliminates multiple and discriminatory taxation, protects Main Street businesses from competitive disadvantage and ensures that state and local governments, those most responsible for building roads, locking up criminals and educating children, can do so. States would adopt a single simplified sales tax rate. Instead of 30,000 disparate tax codes, there would be no more than 50. Our proposal also would redefine "nexus" so the new system can be implemented. And the fix would be fashioned within the window of Congress's three-year moratorium on Internet taxes. Critics have tried to reduce this complex problem to an easy sound bite: " no new taxes." In fact, the sales tax is an existing tax that currently isn't collected on a select class of transactions. A streamlined sales tax will unshackle businesses, governments and taxpayers and resolve an imbalance that otherwise would result in new taxes down the road. We can put off a decision. But there is a time in the life of every problem when it is large enough to see but still small enough to solve. The Internet is a dynamic force that offers access to worldwide information, goods and services with the push of a button. The more widespread its use becomes, the faster we all benefit. Author: Gov. Michael O. Leavitt Leavitt is the governor of Utah. He is the National Governors' Association's co- lead governor for Internet development policy.