Washington Report

Keeping Members Informed About Regulatory Issues

Contents
April 2000

CATALOG ISSUES UPDATE

INTERNET ADVISORY COMMISSION ISSUES ITS REPORT

On April 12, 2000 the Chairman of the Advisory Commission on Electronic Commerce (ACEC), Virginia Governor Jim Gilmore, along with several of the Commissioners, delivered the Commission's final report to Congress. The report was received officially by the Congress at a ceremony attended by Senate Majority Leader Trent Lott, Speaker of the House of Representatives Dennis Hastert, House Majority Leader Dick Armey, Virginia Senator John Warner and Virginia Representative Bob Goodlatte. The presentation of the ACEC final report completed the work of the 19-member commission created by the Internet Tax Freedom Act, which was enacted in October, 1998.

At the conclusion of the final meeting of the ACEC on March 21, 2000 in Dallas, the Commission decided not to vote on the final report and continued further negotiations to try to reach a two-thirds majority or 13 votes for the proposals. After further negotiations, however, it became obvious that no compromise could be reached, and the report would have to be sent to Congress with most of the proposals supported by only 11 commissioners. The report, while not perfect, does include a number of pro-taxpayer proposals that will help ensure the continued growth of the Internet. They include the following:

• Eliminating the 3-percent federal excise tax on telecommunications;
• Establishing standards for simplification of state tax systems;
• Defining nexus standards for a company's physical presence and providing specific examples;
• Making permanent the ban on Internet access taxes;
• Establishing a new advisory commission to oversee states' tax simplification efforts;
• Extending the current moratorium on Internet taxation for an additional five years.

The report also includes separate statements by each commissioner. These statements clearly illustrate the many divergent views held by the various factions on the Commission. The report is available on the ACEC website, which can be found at http://www.ecommercecommission.org/.

Both the House and the Senate leaders indicated that they hoped to introduce and pass legislation this year that incorporates some of the proposals in this report. For those interested in Internet taxation and an expanded duty of remote sellers to collect sales and use taxes, it will be a very active year.

back to contents

  © Direct Marketing Association | Privacy Statement | Disclaimer | Current Issue