October 7, 1999
The Honorable Trent Lott Majority Leader United States
Senate Washington, DC 20510 |
The Honorable Thomas A. Daschle Minority
Leader United States Senate Washington, DC
20510 |
Dear Majority Leader Lott and Minority Leader Daschle:
The nation's Governors strongly oppose any efforts to extend the
duration or expand the scope of the moratorium imposed by the
Internet Tax Freedom Act. The Internet Tax Freedom Act
was the product of intensive negotiations and deliberate compromise
between Congress and state and local leaders. Changing
the moratorium would unravel the delicate balance we achieved last
year and undermine the work of the Advisory Commission on Electronic
Commerce.
The proposed expansion of the moratorium contained in S. 1611
represents a major assault on state sovereignty. The levy
of sales and use taxes is an inviolable right of the
states. S. 1611 would prevent states from
collecting taxes on mail-order and Internet sales that occur
entirely within their own boundaries and have no interstate
component whatsoever. Furthermore, S. 1611 would not just
be limited to remote sales, but would also prevent states from
collecting taxes on many sales that occur in traditional retail
stores. This would clearly violate the Unfunded Mandates
Act, seriously jeopardize public education funding, and
substantially increase discrimination against Main Street
businesses.
The commission has already met twice and has two more
meetings scheduled before it reports its findings and
recommendations to Congress. As directed by Congress, the
commission is attempting to deliberate the critical issues related
to taxation and the Internet. Any action by Congress to
interfere with that mandate, such as extending or expanding the
moratorium before the commission completes its work, would
prematurely halt the serious and much-needed examination of these
issues.
Governors, together with the business community, are working hard
to develop a system that is fair and that eliminates burdens on
Internet sellers. We are optimistic that we can achieve such a
solution. Altering the moratorium today we think is
unnecessary and unwise. We urge you to reject S.
1611.
Sincerely,
Governor Michael O. Leavitt |
Governor Parris N. Glendening |
(Signatures on file) |