Below, please find summaries and links to recent articles of interest on the topic of Internet Taxation.
The Boston Globe
By Jeff Jacoby, 5/21/2001
Q. SAYS HERE a lot of governors are upset about Internet
scofflaws not paying the taxes they owe. Who are these bums?
A. Well, Governor Leavitt of Utah and Governor
Engler of Michigan.
Q. No, not the governors! I meant who are the bums that aren’t paying their taxes?
You, for one.
Click on “More” to view the full article...
Internet Moves Closer to Tax Haven
By Mark W. Vigoroso, E-Commerce Times
August 3, 2001
Representative Melvin Watt (D-North Carolina) told the E-Commerce Times that ’there’s a disparity between (taxing)
brick-and-mortar stores and Internet stores that should not exist, any more than taxation on Internet access should
The U.S. government moved one step closer to a permanent ban on Internet access taxes and a five-year
extension on the moratorium on multiple or discriminatory Internet taxes Thursday, when the House Judiciary Subcommittee
on Commercial and Administrative Law passed the “Internet Tax Nondiscrimination Act” (H.R. 1552).
Judiciary Committee spokesperson Jeff Lungren told the E-Commerce Times there is more work to be done when the bill
moves to the full Judiciary Committee in September, before going to the full House.
“I expect a much more spirited
debate in September,” Lungren said.
For the full text of the article, click on “more” to the right to visit
On May 1, 2001, the Senate Commerce Committee opted to postpone a vote on Internet taxation after negotiators failed
to reach an agreement on business income taxes for Internet retailers. Authors of Senate Bill 288 (Senator Ron Wyden)
and Senate Bill 512 (Senator Byron L. Dorgan) are working to negotiate an agreement on Internet taxation.
512 encourages states to simplify sales taxes, by creating one sales tax rate per state or by creating a blended sales
tax rate. Under the bill, if at least 25 states simplify their sales taxes, then Congress would vote on granting states
the ability to collect Internet sales taxes. S. 288 seeks to extend the current moratorium through 2006.
text of the article, click on “more” to visit the Boston Globe Web site.
At the annual meeting of the Electronic Industries Alliance (EIA) on May 8th, President George W. Bush told high-tech
leaders that he supports the permanence of an Internet moratorium against states sales taxes generated by e-commerce
Bush stated, “Government has got a unique role. The role of government is not to create wealth. The role
of government is to create an environment in which entrepreneurs can flourish.” This statement reaffirms his stance on
the issue that he took during his 2000 presidential campaign.
For full text of the article, click on “more” to
visit Yahoo’s daily news site dedicated to Internet Taxation.
Pew Internet & American Life Project finds the federal government has become one of the biggest online retailers in
By Judi Hasson and Graeme Browning
Move over, Amazon.com! Make way for your newest competitor
in e-retailing: the federal government.
In the first comprehensive study of its kind, Federal Computer Week and
the Pew Internet & American Life Project found that the government has become more successful at online retailing than
the company whose name is synonymous with online shopping. Last year, Uncle Sam sold more than $3.6 billion in products
and property via the Internet. Amazon.com reported net sales of $2.8 billion in 2000.
For full text of the article,
click on “more” to visit the Pew Web site.
By Robyn Weisman
June 27, 2001
Analysts say Congress will eventually have to consider lifting
the ban on Internet sales taxes as online transactions grab a larger share of retail revenues.
Marking the latest
skirmish over online tax policy, two GOP governors on Tuesday debated whether state sales taxes should be collected on
Members of the House Judiciary Subcommittee on Commercial and Administrative Law heard testimony
from Michigan governor John Engler, vice chairman of the National Governors Association, and from Virginia governor James
Gilmore on extending the moratorium on Internet-related taxation, also known as the Internet Tax Freedom Act (ITFA).
The present ban will expire on October 21st, although it appears likely that Congress will extend the ban for another five
years, Giga Information Group analyst Jim Grady told NewsFactor Network.
For more information click on “more” at to
visit Newsfactor’s site.
Currently, Internet or catalog merchants based in another state are often not required to collect sales tax for items
delivered to you in your state. Congress is considering a law which would force all such merchants to begin collecting
sales tax from you. Do you favor or oppose such a law?
Phone Poll Interactive Poll
Favor 28 9
Oppose 66 83
Not Sure 7 7
Total 100 100
July 19, 2001
State and local government groups oppose any attempt to extend the
Internet tax moratorium without addressing the simplification concerns.
With just three months left before a
moratorium on taxes that specifically target the Internet expires, U.S. House lawmakers Wednesday expressed a “sense of
urgency” about passing an extension of the moratorium without all of the peripheral state sales tax issues that have
restricted action on the ban so far this year.
The comments came at a House subcommittee hearing Wednesday on H.R.
1410, a bill proposed by Rep. Ernest J. Istook (R-Oklahoma) that would extend the ban and would allow states to enter into
a compact to tax out-of-state sellers once a sufficient number of them can show they have tidied up their confusing quilt
of taxing jurisdictions.
Current law allows states to require out-of-state vendors to collect sales and use taxes
only if they have physical presence, or “nexus,” in the buyer’s state. However, many lawmakers in the House are worried that
the simplification measures could endanger a vote on extending the ban before it expires on October 21st.
simply no time for further delay,” said Rep. Bob Barr (R-Georgia), chairman of the House Judiciary Commercial and Administrative
Law subcommittee. “While halting progress had been made, our time to act is running out, and we cannot afford to wait.”
Rep. George Gekas (R-Pennsylvania) also cited a “sense of urgency” on proceeding to a vote on a clean
moratorium bill, given the Senate’s tendency to move more deliberately on legislation. “Knowing that the other body puts less
emphasis on timetables than this body does, we need to follow up on a quick timetable of our own to give lead time” to the Senate,
he said. State and local government groups oppose any attempt to extend the Internet tax moratorium without addressing the
simplification concerns, arguing that the deadline adds a sense of urgency to addressing the issue that would be lost if Congress
simply passed a standalone moratorium extension.
Nailing the Specifics
“I would like to solve both issues at the same
time unless it becomes obvious that we can’t do so,” said Rep. Mel Watt (D-North Carolina) the subcommittee’s ranking Democrat.
Istook’s bill is the only House version of the measure that incorporates simplification with an extension of the moratorium.
Negotiations over two competing, yet similar bills in the Senate have deadlocked over specifics of simplification requirements.
Istook placed the blame for the slow deliberations squarely on lawmakers that have resisted combining the two issues. He also
predicted states and localities would simply raise income and property taxes to make up for the downturn in sales tax revenues
that many attribute to a rise in online sales.
Keep it Simple
“The reluctance of some to couple the simplification
effort with moratorium legislation is making it more difficult to resolve the details,” he said. Most simplification plans would
allow states to require vendors to use software that would track sales taxes due based on tax rates in the buyer’s jurisdiction.
Out-of-state sellers would then be compensated for any costs incurred in collecting the tax. Grover Norquist, president of Americans
for Tax Reform, said the notion that online sales are draining revenue from state coffers was a “false argument,” adding that the
simplification plans raise critical privacy issues.
“If you’re going to have to have a big computer system that knows
where you live and what you bought so that at the end of the day there’s a list of everything you paid for, that’s an awful lot of
information for people to be handing over to government so that it can raise an extra penny,” he said.
Democrats on the panel called the privacy argument a red herring, but at least one panelist conceded that the tax software solution
was not a tidy solution in and of itself. Jon W. Abolins, vice president of Taxware International, said while simplification was a
valid goal, the standards for tax technologies would have to be simplified as well. “The lack of uniform standards for tax technology
forces every business to develop a customized sales tax compliance system, even if third-party tax calculation software is applied,”
On the Grandfather Clock
So far, some 13 states have approved legislation designed to simplify their
sales tax systems, and more than a dozen more have plans to do so before the end of the year. While at least 10 states currently
impose a tax on Internet access -- and were grandfathered into the moratorium when it passed -– it is unclear whether states
have any plans to impose new Internet-specific tariffs should Congress fail to extend the moratorium. Norquist said he had no
doubt states would jump at the chance. States “will be at the throat of the Internet in a second,” Norquist told lawmakers.
“If you guys can’t get to the moratorium extension, we’re going to have an awful lot of work to do.”
Lawmakers Mull Yet Another Net Tax Plan
By John L. Micek, NewsFactor Network
April 27, 2001
by U.S. Senators George Allen and Conrad Burns mirrors a House bill to extend the moratorium on redundant taxes by six years.
Quick, which member of the U.S. Congress has the best plan to ban taxes on Internet sales? To hear the lawmakers tell
it, they all do.
At least a half-dozen Internet tax proposals are already making the rounds of the U.S. House and
Senate. And on Wednesday, two more lawmakers threw their hats into the ring.
The proposal, sponsored by U.S. Senators
George Allen (R-Virginia) and Conrad Burns (R-Montana), closely mirrors legislation introduced in the House earlier this week
that would extend the moratorium on redundant taxes by six years.
Allen and Burns say they want to go one better than
the House and make the moratorium permanent. U.S. Representative Christopher Cox (R-California) and Virginia Republican
Representatives Robert Goodlatte and Thomas Davis are sponsoring the House legislation.
For full text of the article,
click on “more” to visit NewsFactor’s Web site.
Presentation focuses on fighting taxes on Internet
By Jennifer Voges,State Press
ASU students were urged to fight
against a possible Internet tax in a presentation Thursday night.
The Associated Students of ASU and the College
Republicans presented Jennifer Holder, executive vice-president of NoInternetTax.org, an organization that vows to protect
the Internet and consumers from unnecessary taxation.
“Taxation and regulation of the Internet is a very real and
serious issue,” Holder said.
NoInternetTax.org focuses on people who are Internet users to help the organization
resist government taxation.
“The whole speech is geared toward college students,” said Oubai Shahbandar, chairman
of the College Republicans.
Shahbandar said that because college students are Internet-savvy, they should fight
against the proposed tax.
“College students are the ones who will get hurt the most from an Internet tax,” he said.
Shahbandar said he is hoping ASU students will stand behind NoInternetTax.org to challenge the Internet tax.
“I don’t want my Internet taxed,” he said.
Holder’s speech fell on the same day that President Bush signed a bill to
extend a moratorium, which means the government cannot tax the Internet for another two years. But Holder said in the years
to follow there will be many debates.
The proposed tax would apply to almost any activity on the Net including downloads,
e-mail, e-Commerce, MP3 files, broadband access and ISP access.
Although the U.S. government has not determined an actual
amount for the tax, other nations such as China already have a tax rate per minute on the Internet, Holder said.
United Nations proposed a plan in which every 100 e-mails would result in a tax of one penny, Holder said.
If a tax were
put into effect it would create a “national collection center” which would monitor each person’s activity and shopping habits
on the Internet.
The public must tell the nation’s governors “no,” Holder said.
Holder said 43 United States
Senators and 44 governors in both political parties support taxing the Internet.
“This is not a Republican issue, this
is not a Democratic issue. This cuts across all party lines,” she said.
Reach Jennifer Voges at email@example.com.