FC: Senate extends Net-tax moratorium for two years

From: Declan McCullagh (declanat_private)
Date: Thu Nov 15 2001 - 18:22:51 PST

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    Date: Thu, 15 Nov 2001 19:43:38 -0500
    Subject: Senate Extends Moratorium on Internet-Access Taxes
    From: Matt_Raymondat_private (Matt Raymond)
    The U.S. Senate tonight on a voice vote extended the moratorium on
    Internet-access taxes, and taxes that discriminate against the Internet, by two
    years.  The moratorium had expired on Oct. 21, 2001. The bill, which passed 
    the House last month, now moves on to the White House for
    the President's signature.  The President is expected to sign the bill,
    according to a recent Statement of Administration Policy. Senator George 
    Allen (R-VA) has been a vocal proponent of a "clean" extension of
    the moratorium.  He also was a chief opponent of a controversial amendment to
    create new Internet taxes and to compel retailers outside the boundaries of a
    State or locality to collect and remit sales taxes to that political entity.
    That amendment failed on a vote of 43-57. Earlier today he also announced 
    the endorsement of the clean two-year extension
    by the Senate Republican High Tech Task Force, which he chairs. On the 
    Senate floor this evening, Senator Allen said: "The reality is if we pass 
    this amendment, the substitute imposes Internet
    access taxes and allows discriminatory taxes on the Internet.  This does
    complicate the tax code. It is a very complex issue, which actually makes it
    worse. There are unfair taxes that could occur even within a State if this were
    adopted and, indeed, has added taxes. "Now, if we allow this amendment to 
    be put on, let's make no doubt about it, the
    House is not going to conference; we will have this expired moratorium
    continuing. There are already States that have access taxes that are
    grandfathered. These are taxes like the Spanish-American War tax that was 
    put on
    for telephone service, a "luxury."  Once a tax is put on by a State or 
    it is very hard to get them off.  "Our side, the opponents of this 
    amendment, side with individuals. We side with
    entrepreneurs, rather than siding with the tax collectors. "Now, we have 
    heard here that this is a loophole. The fact that someone who has
    no physical presence in a state gets no benefits from fire or police services,
    that they do not have to collect and remit sales and use taxes to 7,600
    jurisdictions, that that's not a level playing field or it is a loophole.  I
    look at the Internet as an individualized enterprise zone where the consumer,
    the individual, the human being is the one making the decisions, not
    tax-collecting bureaucracies.  "While this is all very well-intentioned, 
    the solution is not burdening the free
    enterprise system. The solution is not harming the Internet and the 
    and potential and possibilities of the Internet for education, 
    communication and
    commerce. And indeed what is being tried here with the Enzi-Dorgan amendment is
    to abrogate and negate a settled constitutional law from court decisions,
    whether it was the Quill decision or Bella Hess decision that says there can't
    be taxation without representation. "I would like to work with the 
    proponents of this amendment to find a system
    where the folks who care about local schools, as Senator Dorgan stated, can pay
    those use taxes. But I am going to stand on the side of freedom, freedom of the
    Internet, trusting individuals and entrepreneurs, not on the side of making 
    advancement in technology easier to tax for the tax collectors."
             CALIFORNIA              <http://cox.house.gov>http://cox.house.gov
    Internet Tax Moratorium Extended
    Senate Finally Acts to Renew Ban on Discriminatory Taxes
             WASHINGTON (Thursday, November 15, 2001)-Today, the Senate 
    approved House Policy Chairman Cox's Internet Non-Discrimination Act (H.R. 
    1552), a two-year extension of the existing Cox-Wyden moratorium on new, 
    special, and discriminatory Internet taxes that was enacted in 1998.
             "This is wonderful news," said a much-relieved Chairman 
    Cox.  "Senator Wyden deserves a gold medal for his resolve to pass this 
    bill.  His commitment to disarming the tax collectors who target the 
    Internet for discriminatory tax treatment is heroic."
             Last April, Vice President Cheney called on Congress to extend the 
    Internet tax moratorium, and to enact a permanent ban on all Internet 
    access taxes before the year was out.  H.R. 1552 extends the moratorium on 
    multiple and discriminatory taxes, and bans access taxes for two more 
    years.  The legislation also extends the "Sense of the Congress" resolution 
    that there should be no federal taxes on Internet access or electronic 
    commerce, and that the United States work aggressively through the EU and 
    WTO to keep electronic commerce free from tariffs and discriminatory taxes.
             "Although I would have preferred to honor Vice President Cheney's 
    wishes that access taxes be banned permanently, this is a fair compromise," 
    said Chairman Cox.  "The bottom line is that consumers know that for the 
    next two years, the Internet will not be singled out for unfair tax treatment."
    #   #   #
    Contact: Fraser Traverse
    (202) 225-5611
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