Copyright 2000 The New York Times Company
The New
York Times
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February 4, 2000, Friday, Late Edition -
Final
SECTION: Section A; Page 20; Column
1; National Desk
LENGTH: 442 words
HEADLINE: Congress Gets Bill to Continue Ban on New
State Taxes on Internet Commerce
BYLINE: AP
DATELINE: WASHINGTON, Feb. 3
BODY:
A ban on new state or local taxes that single
out the Internet would be extended indefinitely under bipartisan legislation
introduced today in Congress, but the bill would not settle the question of how
existing sales taxes should apply to e-commerce.
The bill's main
sponsors, Senator Ron Wyden, Democrat of Oregon, and Representative Christopher
Cox, Republican of California, said people on both sides of the sales
tax debate agreed that the current three-year ban on new
Internet taxes should be continued.
"Our bill simply
says you can't stick it to the online world," Senator Wyden said. "We shouldn't
discriminate against the most vibrant part of the economy."
The law
enacting the temporary ban, which expires in October 2001, also created a
Congressional commission to recommend future tax policy for the Internet. The
panel's report is due in April, and both Mr. Wyden and Mr. Cox said they
expected that one recommendation would be to extend the ban.
"The
current hands-off tax policy is working," Mr. Cox said.
It is unlikely,
however, that the advisory panel will reach consensus on how existing state
sales taxes should apply to Internet commerce.
Even if it did, Congress would be reluctant in an election year to try to
overturn a Supreme Court decision requiring a remote seller -- catalog, Internet
or otherwise -- to have a physical presence in a state before that state can
force it to collect and remit sales taxes.
In Senate testimony this
week, Gov. John Engler of Michigan, who like most other governors favors a new
system to collect sales taxes from the Internet, agreed that
other taxes should be banned on such things as
Internet access.
"We should not impose new surcharges
or access fees to this emerging technology," Mr. Engler, a Republican, told the
Senate Budget Committee.
Several members of Congress are pushing a bill
that would also permanently ban states from imposing sales taxes on e-commerce,
a position central to Senator John McCain's presidential campaign.
Other
lawmakers prefer waiting until there is conclusive evidence about the
Internet's impact on state government revenue. The
sales tax now accounts for about $150 billion in revenue to
states, about two-thirds of their total take.
"What if they find that
their revenue sources are coming up short?" asked Senator Pete V. Domenici, the
New Mexico Republican who is chairman of the Budget Committee. "This hasn't
happened yet, but if it does, either other forms of state and local taxation
will be needed, services will be reduced or demands will be placed back on the
federal government to make up the
shortfall."
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LOAD-DATE: February 4,
2000 
