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Washington, DC -- U.S. Senator
Ron Wyden (D-Ore.) and Representative Christopher Cox (R-Calif.) have
introduced legislation to indefinitely extend the existing moratorium
on new and discriminatory Internet taxes. The current Cox-Wyden law,
authored by Sen. Wyden and Rep. Cox and titled the Internet Tax Freedom
Act (ITFA), prohibits three types of taxes that unfairly single out
the Internet. These include taxes on Internet access, double taxation
(for example, by two or more states) of a product or service bought
over the Internet, and discriminatory taxes that treat Internet purchases
differently from other types of sales. In addition to authoring the
original law, Sen. Wyden and Rep. Cox also wrote the Internet Tax
Non-Discrimination Act, legislation that extends the moratorium until
November of this year. "Putting
new, unfair Internet taxes on the backs of consumers is not the
way to fix state and local budget troubles. It could seriously weaken
the growing Internet economy and take jobs away from folks working
for small web companies," Wyden said. "Rep. Cox and I
want to make sure that Internet access and Internet commerce are
never subject to arbitrary or discriminatory tax schemes."
"Since 1998 when the Cox-Wyden bill first
became law, we have had ample time to evaluate the effects of the
moratorium on internet taxes and on the growth of the online economy
in general and e-commerce in particular," Rep. Cox said. "Given
the continued softness in the tech economy, this is hardly the time
for new taxes on the Internet. Rather, providing long-term certainty
about tax policy is one of the necessary ingredients for a tech
rebound."
In 1992, the U.S. Supreme Court reaffirmed
a previous ruling that the nation's 7,600 tax jurisdictions could
not impose sales tax collection burdens on out-of-state sellers
if the seller has no "nexus," or physical presence, in
the taxing jurisdiction. Since enactment of
ITFA, which applies the Supreme Court rulings
to Internet sales, online consumers have been threatened by a growing
number of tax schemes proposed for implementation as soon as the
ban expired. Those schemes range from an arbitrary hodge-podge of
state and local sales and use taxes to the creation of a new "unified"
Federal sales tax. Extending the ITFA ban indefinitely will protect
consumers by making sure e-tailers are to be treated equally with
other businesses.
This legislation is the latest in a long, bipartisan
partnership between Sen. Wyden and Rep. Cox on Internet issues.
In 1995, the two first collaborated on a bill promoting private
sector solutions to online pornography problems. In addition to
ITFA and legislation to extend it by two years, Rep. Cox and Sen.
Wyden also wrote legislation to extend the ban worldwide by directing
the American delegation to the World Trade Organization (WTO) to
make a permanent ban on global Internet tariffs and discriminatory
taxing practices a priority at the November 1999 WTO Ministerial
in Seattle.
The legislation to indefinitely extend the
moratorium will be considered by the Commerce Committee in the Senate,
and by the Energy and Commerce Committee and the Judiciary Committee
in the House of Representatives.
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