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The House in Committee of the Whole House on the State of the Union had under consideration the bill (H.R. 3709) to make permanent the moratorium enacted by the Internet Tax Freedom Act as it applies to new, multiple, and discriminatory taxes on the Internet,

• Mr. SANDLIN. Mr. Chairman, I rise today to address H.R. 3709, The Internet Nondiscrimination Act. The Internet transformed business and commerce in a revolutionary fashion. Congress now must face the daunting task of shaping policy concerning its taxation.

• Mr. Chairman, I come from East Texas, a region that has a heavy concentration of small businesses. Under law, these businesses are required to collect sales tax. In 1992, the U.S. Supreme Court ruled that states cannot require businesses without a physical presence in their geographic area to collect and remit sales taxes. Small businesses were essentially rendered uncompetitive under this ruling. These ``brick and mortar'' stores now face extinction because they are forced to compete with online businesses who do not have to collect state and local taxes.

• As things stand, state and local governments lose about $5 billion annually in uncollected sales taxes on mail order purchases and are expected to lose about $15 billion annually in uncollected sales taxes on Internet purchases by the year 2003. I am aware that the Internet is the engine driving current economic growth and am in no way trying to jeopardize its growth. The Internet provides access to products that my rural constituents would not otherwise be able to purchase. However, I believe that electronic commerce and small business should exist on a level playing field with regard to taxation. It is time that Congress begins to address the task of creating a fair tax code for online retailers and their brick and mortar counterparts.

• I urge my colleagues to work toward a technology neutral, simplified, sales tax system which guarantees that buyers and sellers are treated equally. it is important that Congress be given and appropriate period of time to build a consensus on the long-term solution to Internet taxation issues. We must be careful to avoid a hasty, ill-conceived tax system that places unnecessary tax burdens on our consumers and sellers.

• I stand in support of H.R. 3709, The Internet Nondiscrimination Act. It is my hope that, in the future, Congress will go one legislative step further and address the issues surrounding e-commerce taxation.

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