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N EWS RELEASE
Date: April 5, 2000Media Contact: Bill Wyatt, 202-624-8667 / Gene Rose, 303-830-2200 State Legislators Urge Congress to Receive Lopsided E-Commerce Report With Caution
ACEC Process Smacks of Unbridled Influence WASHINGTON, D.C. -- As a U. S. House subcommittee prepares to receive the Advisory Commission on Electronic Commerce's (ACEC) report on internet taxation, the nation's state legislators are cautioning Washington lawmakers to consider the source of the report. "Congress should take the ACEC report with a grain of salt," said Tennessee Representative Matt Kisber who serves as the co-chairman of the National Conference of State Legislatures' (NCSL) Executive Task Force on Electronic Commerce. "This report, which failed to reach the two-thirds majority benchmark established by Congress, is a mere reflection of the wish list of industry giants such as AOL/Time Warner, Gateway and AT&T." The ACEC's report would preempt state and local governments' ability to establish and administer their own sales and use tax policy. Additionally, the report is laden with loopholes and incentives targeted towards the high-tech industry ignoring 'brick and mortar' retailers' pleas for equity. "The Commission touts the report as a step towards tax fairness," stated Illinois Senator Steve Rauschenberger, co-chairman of NCSL's Executive Task Force on Electronic Commerce. "However, they fail to mention that it's only fair if you are a billionaire entrepreneur whose company is publicly traded on the stock market. This report does nothing to maintain the quality of life for the 'Main Street' businesses that are the heart and souls of our communities. When was the last time you saw a little league team sponsored by AOL?" Virginia Governor Jim Gilmore, the ACEC chairman, will deliver the report to Congress at a hearing of the House Subcommittee on Telecommunications, Trade and Consumer Protection. Despite the Commission's failure to achieve a two-thirds consensus for any recommendations on the collection of sales tax from Internet retailers, the report of the Commission will only reflect the views of the eleven commissioners who voted for the industry proposal. The eight other commissioners were denied the opportunity to file a minority report, contrary to established congressional procedures. "AOL, Time Warner, Gateway and the others tried to 'launder' their political wish-list through a Congressionally appointed Commission that had a great deal of potential," said Representative Kisber. "However, when it became clear to them that the votes weren't there to support their agenda, they began to make up the rules as they went along. The refusal of the industry members to include a minority opinion in the report is just the icing on the cake." Senator Rauschenberger concluded. Several dissenting members of the Commission as well as state and local government organizations will hold a press conference on Friday, April 7, 2000 at 10:30 a.m. in room 342 of the Dirksen Senate Office Building to discuss what went wrong with the Commission and the progress states have already made in streamlining the sales and use tax process.
State legislatures have begun the process of reforming the sales and use tax collection process despite the ACEC's inability to formulate sound public policy on the issue. NCSL's Executive Committee Task Force on State and Local Taxation of Telecommunications and Electronic Commerce has worked for the last year to address how states can modernize their state-local sales and use tax systems to accommodate the rapid changes in technology and the explosion of Internet commerce. NCSL's model legislation, currently pending in over 18 state legislatures, will allow states to participate in discussions with other states on developing a voluntary, streamlined, multi-state system for the collection and administration of existing sales and use taxes.
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