 National Association of Counties * Washington, D.C. Vol. 33, No. 20 * October 29, 2001 Previous story | Table of Contents | Next story House passes Internet moratorium, Senate lags By Ralph Tabor
The House last week passed a two-year extension of the moratorium on Internet access taxes and discriminatory taxes on electronic commerce. The current moratorium expired on Oct. 21. The bill, H.R. 1552, was brought to the House floor under suspension of the rules which allows no amendments, and was approved by voice vote. NACo supported the two-year extension along with most of the other state and local government organizations, retailer groups and technology companies involved in e-commerce. The Senate also had been expected to vote on the House-passed bill prior to the expiration of the moratorium. However the Senate did not act in time because of the anthrax-caused closure of the Capitol. Senate Majority Leader Thomas Daschle (D-N.D.) is now indicating that any new moratorium should include legislation addressing sales tax concerns. Sen. Byron Dorgan (D-N.D.) agreed and stated that, “We want to act as soon as possible, but I don’t think state legislatures are going amuck and running out to enact new taxes. We have some time.” However, it is not clear that the Senate will have time to act on a sales tax compromise during this session, and it is also not clear whether the House will try to find some other must-pass legislation to attach a moratorium as an amendment. In the meantime, in an effort to develop compromise legislation that could have broader appeal, Sen. Michael Enzi (R-Wyo.) sponsored a revised sales tax simplification and Internet access tax bill (H.R. 1567). Cosponsors include Sens. Dorgan, Kay Bailey Hutchison (R-Texas), John Kerry (D-Mass.), Craig Thomas (R-Wyo.), Bob Graham (D-Fla.), George Voinovich (R-Ohio) and Tim Hutchinson (R-Ark.). The bill was introduced Oct. 18. The Enzi legislation would ban Internet access taxes permanently in states that do not have such taxes in place already. It would extend the ban on discriminatory taxes on electronic commerce through the end of 2005. S. 1567 would provide authority to require retailers to collect out-of-state sales taxes for those states that simplified their taxes. The list of simplifications is similar to proposals being developed by 30 states under the Streamlined Sales Tax Project. The bill provides for collection of actual state and local sales taxes or a blended average of sales tax rates within a state. This would be determined by the state. The legislation would exempt vendors with less than $5 million in annual sales. To gain more support, the bill further clarifies and defines Internet access services and telecommunication services. |