RealTime IT News

New Internet Tax Bill Proposed

U.S. Senator Ron Wyden (D-Oregon) and Representative Christopher Cox (R-California) have co-authored a proposal for Internet tax legislation.

With the current moratorium on Internet taxes set to expire in October 2001, the pair Thursday presented Cox-Wyden IV, their Internet tax package, to the Senate Committee on Commerce, Science and Transportation.

Wyden and Cox's proposal extends the current moratorium on new, "discriminatory" Internet taxes by five years, and makes the ban on Internet access taxes permanent.

The proposal also seeks to help states and localities streamline tax collection processes to avoid imposing undue burdens on the growing e-commerce sector.

According got Wyden, the proposal aims to protect consumers "by giving states and localities a blueprint of fair, Constitutional ways to simplify tax collection and promising quick consideration by Congress of such plans when proposals are made."

While specifying criteria to improve tax systems, the proposal does not dictate terms to the states, which can present their plans to Congress at any time.

"This is about fairness," Wyden said. "Chris and I want to continue the e-commerce boom we've gotten from our ban on discriminatory taxes, and make sure Internet access is never subject to an arbitrary tax scheme.

"We also want to extend an olive branch to the states," he said. "If they simplify their tax systems, they'll get a clean vote on that issue in Congress."

Since the 1998 launch of the Internet Tax Freedom Act (ITFA), which established the temporary moratorium on Net taxes, online consumers have been threatened by a growing number of tax schemes.

"These 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," Wyden said. "Extending the ITFA ban will make sure e-tailers continue to be treated no more or less favorably than other businesses."