Mayors and Counties Will File Suit To Block Internet Tax Commission

The United States Conference of Mayors and the National Association of Counties announced March 2 at a press conference their intention to file suit to block the federal Advisory Commission on Electronic Commerce from meeting, saying that the commission's membership is dominated by business interests and therefore, "illegal."

Betty Lou Ward, president of the National Association of Counties, said at the National Press Club that both NACo and the U.S. Conference of Mayors will file a lawsuit on March 8 seeking an injunction in Federal District Court to prevent the Commission from meeting until the Commission conforms with the law.

"This is not an action that we take lightly or in haste. But we have been left with no other choice," Ward said.

"We have filed the suit because the commission is clearly weighted toward the Internet and technology business community," Ward continued. Congress created the commission in October through the Internet Tax Freedom Act. The commission was created to study sales taxation and Internet transactions, and then to make recommendations to Congress by April 2000.

According to the law, the commission was to be composed of eight representatives from the business community and eight representatives from state and local government. However, congressional leaders appointed nine business representatives, six state and local officials and one private citizen.

"The actions of the congressional leadership exemplify an arrogant disregard of a law that clearly calls for state and local representation equal to that of business interests. It is clear the membership has been stacked against local government," said Conference Executive Director J.Thomas Cochran.

NACo and the Conference also announced that they would approach other state and local groups about establishing a task force on equitable taxation. This task force would make recommendations to Congress and the president on how to solve the fairness issues between local and out-of-state retailers on the question of sales taxes.

The Conference wrote to congressional leaders informing them of the Conference's intention to file suit March 8 unless the imbalance on the commission were corrected. "We begged Congress to work with us on this equity and fairness issue," Cochran said. Staff for Senate Majority Leader Trent Lott, Senate Minority Leader Tom Daschle, House Minoriity Leader Richard Gephardt and House Speaker Deny Hastert have discussed how to correct the commission's tilt toward business interests. According to NACo, Lott asked the four business appointees if one would be willing to step down from the commission. Lott received a negative response.

USCM and NACo representatives said business officials are making misleading statements that forcing them to collect and remit sales taxes would be too complex. "They know my shirt size and shoe size," said Larry Naake, NACo's Executive Director. "They sure as hell ought to know what my sales tax is."