
Chairman
The Honorable James S. Gilmore,
III Governor Commonwealth of Virginia
Members
Mr. Dean F. Andal Chairman California Board of
Equalization
Mr. C. Michael Armstrong Chairman and
CEO, AT&T
Mr. Joseph H. Guttentag Senior Advisor to the Assistant
Secretary for Tax Policy U.S. Department of the
Treasury
The Honorable Paul C. Harris Sr. Delegate Virginia House
of Delegates
The Honorable Delna Jones Commissioner Washington
County, Oregon
The Honorable Ron Kirk Mayor City of Dallas
The Honorable Michael O. Leavitt Governor State of
Utah
Mr. Gene N. Lebrun President (1997-1999) National
Conference of Commissioners on Uniform State Laws
The Honorable Gary Locke Governor State of
Washington
Mr. Grover Norquist President Americans for Tax
Reform
Mr. Robert Novick General Counsel U.S. Trade
Representative
Mr. Richard Parsons President Time Warner, Inc.
Mr. Andrew Pincus General Counsel U.S. Department of
Commerce
Mr. Robert Pittman President & Chief Operating
Officer America Online
Mr. David Pottruck President & co-Chief Executive
Officer Charles Schwab and Company
Mr. John W. Sidgmore Vice Chairman MCI WorldCom and
Chairman UUNET
Mr. Stanley Sokul Independent Consultant Association
for Interactive Media
Mr. Theodore Waitt Chairman Gateway,
Inc. |
|
|
For Immediate
Release April 20, 2000 |
Press
Contacts: Debbie Neville O'Keeffe &
Company, Inc. (703) 883-9000, ext.
104 dneville@okeeffeco.com |
Heather
Rosenker Executive Director Advisory Commission on
Electronic Commerce (703)
993-8049 rosenker@gmu.edu |
Mark Miner Press
Secretary Office of the Governor of Virginia (804)
692-3110 mminer@gov.state.va.us |
E-Commerce Commission Report
Addresses the Growing 'Digital
Divide'
Arlington, VA - April 20, 2000 - In a formal
recommendation, the Advisory Commission on Electronic Commerce
concluded that Congress should reduce communications taxes,
clarify federal welfare guidelines, as well as encourage
states and localities to partner with companies to help gap
the "Digital Divide." The term refers to the disparity between
individuals with and those without access to a computer and
the Internet. According to a study by the U.S. Department of
Commerce, urban households earning incomes in excess of
$75,000 are over twenty times more likely to have home
Internet access than rural households at the lowest income
levels.
"Many of the recommendations adopted by the majority will
result in reductions to taxes paid by consumers," said
Commission member John Sidgmore, vice chairman, MCI WorldCom,
in his letter included in the Commission's Report to Congress.
"Two are especially noteworthy: the recommendation to
permanently repeal taxes on Internet access and the
recommendation to repeal the Federal excise tax. These reforms
will promote increased access to essential technology and help
bridge the Digital Divide."
In an effort to reverse a 102-year old tax, the
Commission's Report encourages Congress to eliminate the three
percent Federal excise tax on communications services, the
third largest such tax behind those on alcohol and tobacco.
Originally established in 1898 to assist with financing the
Spanish-American War, the tax continued for the same purpose
for World War I. The tax is typically applied to local and
long-distance telephone services, including the use of phone
lines to access the Internet.
"The Advisory Commission on Electronic Commerce was
absolutely correct to identify this tax as a contributor to
the digital divide, and as ready for repeal," said Commission
member C. Michael Armstrong, AT&T chairman and CEO.
"Repealing the excise tax would produce a long overdue tax
break for American consumers. Corporations don't pay the tax,
consumers do. AT&T and other telecommunications companies
are required to collect it for the government. So while repeal
won't help AT&T's bottom line, it will help every consumer
who uses a telephone. Those consumers, in turn, would see
their bills drop by 3 percent overnight."
"It is imperative that all citizens have the opportunity to
participate in the Internet economy," said Commission
Chairman, Virginia Governor James S. Gilmore, III. "Reducing
the expense of Internet access, one of the contributing
factors to the Digital Divide, is a key component of the
Commission's Report to Congress."
Governor Gilmore added, "America's policy should be to
remove taxes from the Internet and make the home computer as
common as the telephone and television for all Americans."
The Commission recommended that Congress permit states to
spend surplus funds from the Temporary Assistance and Needy
Families program to provide computer, Internet access, and
training to needy families. The Commission also recommended
that incentives such as Federal and state tax credits and
Federal matching funds be considered as incentives for private
technology companies to partner with localities to make
computers and the Internet more widely accessible. Those
recommendations were proposed by Governor Gilmore.
The Commission's Report, including both recommendations
that received two-thirds or more of the Commissioners' support
as well as majority policy proposals, was submitted to
Congress April 12. At its final meeting last month, the
Commission voted to include key issues in its Report to
Congress, including recommendations on:
- The need to bridge the "Digital Divide";
- Protecting consumer privacy on the Internet; and
- Making permanent a standstill on international tariffs
on electronic commerce.
The report also details majority policy positions in key
areas, including:
- Repealing of the Federal three-percent tax on telephone
services;
- Simplifying state sales and use tax systems;
- Prohibiting states or localities from taxing Internet
access charges;
- Extending the current Internet tax moratorium; and
- Clarifying nexus standards.
For more information about the Commission, its meetings, or
to view its Congressional report, the public may visit the
Commission's Web site at http://www.ecommercecommission.org/.
About the Advisory Commission on Electronic
Commerce
Appointed by Congress in October 1998 as part of the
Internet Tax Freedom Act, the 19-member Commission has been
tasked with studying the impact of federal, state, local, and
international taxation and tariffs on transactions using the
Internet and Internet Access. The Commission's recommendations
are due to Congress no later than April 21, 2000.
###
www.ecommercecommission.org 3401 North Fairfax
Drive Telephone: (703) 993-8049 · Facsimile: (703)
993-8250 |