Advisory Commission on Electronic Commerce Concludes Business

Arlington, VA - May 4, 2000 - The Advisory Commission on Electronic Commerce, having provided guidance to Congress concerning taxation and electronic commerce, will formally conclude its work and cease operation on May 16, 2000. "All Americans should take pride in the work of the Commission," said Commission Chairman, Virginia Governor James S. Gilmore, III. "Congress is moving forward with legislation that addresses many of the Commission's proposals."

"The 'electronic' frontier is profoundly impacting the U.S. economy and the life of every American," Chairman Gilmore continued. "Let it be known that the 21st Century's first study of the electronic economy sounded a clarion call against taxes and in favor of personal liberty and empowerment. That is our legacy."

The Commission was created 20 months ago by the Internet Tax Freedom Act. It delivered its Report to Congress on April 12, ahead of schedule. The Report includes formal Recommendations that were endorsed by two-thirds or more of the 19 senior industry, government, and public policy executives who served on the Commission. The Report also includes Majority Policy Proposals that were agreed to by more than a majority of the Commissioners.

The Commission made Recommendations to Congress concerning:

• Specific actions designed to bridge the Digital Divide and provide all Americans with access to computers and the Internet;
• Protection of online privacy in the administration of any e-commerce taxes; and
• A standstill on international tariffs targeted at e-commerce.

The Commission's key Majority Policy Proposals included:

• Repeal of the federal three-percent excise tax on each consumer's local and long-distance telephone bills;
• A prohibition on taxation on Internet Service Provider access charges;
• Clarification of "nexus" rules to more clearly define the circumstances under which businesses must collect sales taxes on remote sales and when they must pay business activity taxes in a cyber economy;
• An extension of the current moratorium on multiple and discriminatory taxes on the Internet and e-commerce; and
• Simplification of state sales tax systems.

In the three weeks since the Commission forwarded its Report to Congress, Congressional members have demonstrated support for the Commission's Report by introducing legislation that:

• Repeals the Federal excise tax on telecommunications charges (Representative Rob Portman, R-OH);
• Extends the current moratorium on Internet-related taxes (Representative Christopher Cox, R-CA and Senator Ron Wyden, D-OR);
• Imposes a permanent moratorium on state and local taxes on Internet access (Representative Henry Hyde, R-IL and Representative John Conyers, D-MI);
• Clarifies nexus standards (Senator Judd Gregg, R-NH and Senator Herb Kohl, D-WI); and
• Targets tax incentives at private sector efforts to bridge the Digital Divide (Representative J.C. Watts, R-OK).

Relevant records of the Commission's work, including documents submitted to the Commission for its consideration, will be maintained at the Commission's offices, 3401 North Fairfax Drive, Room 331, Arlington, VA 22201, (703) 993-8049, until May 8, 2000. After that date, documents will be available from the Center for Legislative Archives, 7th and Pennsylvania Ave., NW, Washington, DC 20408, (202) 501-5350. In addition, the Commission's site on the Internet will remain accessible until June 1, 2001, at http://www.ecommercecommission.org/. All documents submitted to the Commission electronically are posted on the site. The entire Report to Congress is also available, as are transcripts, minutes, and agendas from Commission meetings.

The Commission held major meetings in Williamsburg, VA, New York City, San Francisco, and Dallas. "The Commissioners and staff worked diligently over the past year to complete the group's mission on behalf of the Congress and the American public," said Commission Executive Director Heather Rosenker. "The results of their work are a legacy that will provide guidance for public policy discussions for years to come. The Commission wishes to thank everyone who contributed to its work."

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 were provided to Congress on April 12, 2000, ahead of the deadline of April 21, 2000.