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Antitax Groups
Offer e-Commerce Plan by Troy
Wolverton on
11/10/99 of
CNET
News.com Topic:
Press
Coverage |
I By Troy Wolverton Staff Writer, CNET News.com November 10, 1999, 2:25 p.m. PT
A coalition of antitax and consumer groups joined
Housing Budget Committee chairman John Kasich today to present a
plan to a federal commission that would limit taxes on
e-commerce.
In its proposal, the e-Freedom Coalition
recommends that the federal government make permanent its current
three-year ban on new "discriminatory" e-commerce or Internet access
taxes.
The proposal comes in
response to a call for Internet taxation plans by the Advisory
Commission on Electronic Commerce. Established with the Internet Tax
Freedom Act last year, the commission is set to examine the Net tax
issue and make a recommendation to Congress by next April.
The new proposal also comes
two days after Kasich (R-Ohio) introduced a bill that would ban any
local or state sales taxes on e-commerce and also would extend the
current ban on Internet access taxes. Presidential candidate Sen.
John McCain (R-Arizona) introduced a similar bill in the Senate in
September.
The new bills and
proposals are part of a growing debate on Internet taxes. State and
local officials have argued that the tax prohibitions discriminate
against small offline businesses and could mean less money in state
coffers for teachers, police, and other state services.
E-commerce spending is
expected to reach $1.3 trillion by 2003, and much of that is coming
at the expense of offline retailers, analysts say. That in turn
could lead to less revenues for state and local governments.
But Kasich spokesman Bruce
Cuthbertson said that these governments are raising taxes at record
rates. And many local merchants are getting online through eBay,
Amazon's zShops, and Yahoo's stores. State governments should stay
out of the way of the e-commerce revolution, Cuthbertson said.
"The last thing we need is
for them to interfere with growth rates of e-commerce," he said.
Meanwhile, the e-Freedom
Coalition recommends that the government clarify when companies are
required to pay taxes on e-commerce. Typically, state governments
can assess taxes on companies that have a physical presence within
them, but the laws on such taxes are unclear.
The coalition argues that under present laws a
company could be taxed on an online sale by two different states.
For example, the state of California could argue that Seattle-based
Amazon owes it sales tax for transactions made by California
residents. This problem hasn't cropped up yet, but the coalition
says that laws should be drawn up to prevent such occurrences.
In addition, the coalition
recommends that Congress prohibit the government from collecting
data on individual consumer purchases. |
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