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The e-Freedom Coalition's Proposal to the Advisory Commission on Electronic Commerce (summary)
by Staff on 11/10/99
of E-Freedom Coalition
Topic: General, e-Freedom Coalition proposal
I
Recognizing that a citizen's ability to take advantage of all the Internet offers, including e-commerce, completely depends on the Internet's accessibility, the e-Freedom Coalition's proposal begins with five recommendations to tear down and prevent the re-emergence of government-imposed taxes and regulations that serve only to drive up costs for consumers and retard the investments needed to strengthen and maintain the national information infrastructure.

Specifically, in this area we propose:
  • Repealing the federal 3% excise tax on telecommunications.
  • Prohibiting the discriminatory ad valorem taxation of interstate telecommunications.
  • Preventing the installation of "Internet tolls" in the form of above-cost government-imposed fees for the installation of telecommunications cable along right-of-ways.
  • Radically simplifying state and local telecommunications taxes, filing and auditing procedures.
  • Permanently banning Internet access taxes. Such taxes imposed prior to the current, temporary ban should be repealed.

Next, we propose a pro-growth system for the collection of sales and use taxes by companies with a substantial physical presence within the taxing jurisdiction while permanently banning discriminatory taxes on e-commerce. The system would affirm, update and clarify existing constitutional law by setting clear jurisdictional standards that are relevant and easily understood in "new economy." Originally proposed by Commissioner Dean Andal, this proposal will encourage the expansion of e-commerce by improving the certainty of state and local tax responsibilities while striking a blow against "taxation without representation" online.

Our plan ensures that Internet users are free of the onerous tax collection schemes many states and localities want to impose on companies operating completely outside of their jurisdiction.

In short, our proposal hinges on many of the principles that have prevailed in fostering the Internet's own phenomenal growth: openness, fairness, accessibility, freedom, and the minimal involvement of political institutions. We now propose taking the Internet into the next century by increasing its accessibility, encouraging the growth of e-commerce, and enabling tax collection within proper constitutional guidelines.

The full text of the Coalition's proposal is available on its website at www.e-freedom.org.
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