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GOP Govs.
Divided on Internet Taxes by CURT ANDERSON on
11/19/99 of
AP Topic: Gov. Leavitt, Gov. Gilmore |
I WASHINGTON (AP) -
Normally ideological allies, Republican Govs. Mike Leavitt
of Utah and Jim Gilmore of
Virginia are at odds over Internet sales taxes, underscoring
a national
divide.
Leavitt, the current
chairman of the National Governors' Association, believes
existing sales taxes should be
collected on goods sold over the Internet, just as they are at
retail stores in most states.
Gilmore, chairman of a congressional Internet tax advisory
panel on which Leavitt is a member, wants to prevent sales taxes on most e-commerce and
eliminate any other special taxes
that impede the medium's growth.
Their disagreement mirrors the national debate involving
billions of dollars in commerce that has split political parties,
become an issue in the 2000 presidential race and pitted government
officials against high-tech entrepreneurs.
In a speech Tuesday at the National Press Club,
Leavitt outlined a plan for states to phase in a voluntary, simplified e-commerce tax system in
which a ``trusted third party'' would use computer software to calculate, collect and
distribute sales tax dollars based on the location of the
purchaser.
``Everyone despises
taxes,'' Leavitt said. ``But if we have to have them, they have
to be fair.''
Leavitt's plan, which he will propose to the
19-member Advisory Commission on Electronic Commerce at its December meeting in San Francisco,
is endorsed by several other GOP
and Democratic governors, including GOP Gov. Tommy
Thompson of Wisconsin and
Democratic Gov. Parris Glendening of Maryland.
Other backers include organizations representing
state and local governments that fear loss of future revenue.
Leavitt said he expects support eventually from major ``bricks and
mortar'' retailers as they join the e-commerce economy and find
themselves at a competitive disadvantage because of their sales tax
collection burden at dozens of stores.
``This is about fair play,'' he
said.
Gilmore, however, wants
the commission to endorse his proposal to prevent all taxes on
remote Internet sales and remove a current federal excise tax on
telephone service. Gilmore and his
supporters say the Internet must be permitted to prosper
without government
interference.
``It can be
summarized in three words: No Internet tax,'' Gilmore said Monday in
a speech to an Internet commerce
forum. ``Can you hear the people chanting?''
Gilmore's view is backed by Sen. John McCain of
Arizona, the GOP presidential candidate who helped push through Congress a three-year
moratorium on new Internet taxes that also created the advisory
panel. Most GOP House leaders also endorse the no-tax
position.
Republican
presidential front-runner George W. Bush, the governor of Texas, has
not taken a position on the issue,
a spokeswoman said Tuesday. Bush is in a difficult position because, as a governor, he must be
concerned about protecting states' rights and revenue, but as a candidate, he could face political
difficulties if he endorsed new taxes.
In making his
political case, Leavitt said Republicans should remember that tax
policy is the only way state and local governments can control how
they spend money on their schools,
roads, police and environment programs. If pressure grows for a
national system, he said, Congress
and the Internal Revenue Service will have more of
that control.
``I am somewhat surprised by some of my colleagues
in the Republican Party,'' Leavitt said. ``The states have to come up with a solution here.''
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