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President Bush Expresses Support for Extension of Internet Tax Moratorium

The Bush administration recently expressed its support for extending the moratorium on Internet taxation. During a press briefing at the White House, Bush spokesperson Ari Fleischer reiterated the President's campaign pledge to support an extension, and added that the president favors a permanent ban on all Internet access taxes.

The White House's comments come at a time when the debate on Internet taxation is about to heat up in Congress. With the current moratorium set to expire in October, several bills have been introduced on the issue. However, members of Congress, especially in the deadlocked Senate, have failed to reach any agreement on how to proceed.

The two competing measures that appear to have the most momentum in the Senate are sponsored by Senator Ron Wyden (D-Oregon) and Senator Byron Dorgan (D-North Dakota). Both proposals include language that seeks uniformity and simplification of state and local tax codes, which will make it easier for the states to collect sales taxes on online purchases from out-of-state merchants made by their citizens.

However, other lawmakers feel the "simplification" issue should be dealt with separately from the moratorium. Recently, Senator George Allen (R-Virginia) introduced a bill (S. 777) that makes permanent the moratorium. In the House, Representative Christopher Cox (R-California) introduced two bills. One mirrors the Allen bill and the other calls for a five-year extension on the moratorium. All three of these measures do not include the "simplification" language in the Wyden and Dorgan bills.

The Center recently sent a letter of support to Senator Allen and the three co-sponsors of S. 777, as we believe Congress should move to pass a clean and permanent moratorium — free from encumbering attempts to assist states in the collection of state sales taxes. Paying sales taxes on purchases made online is currently the law. The states’ failure to come up with a mechanism to collect such taxes should not compel Congress to assist them.


Links to Bills
S. 288 — Sponsored by Senator Ron Wyden (D-Oregon)
S. 512 — Sponsored by Senator Byron Dorgan (D-North Dakota)
S. 777 — Sponsored by Senator George Allen (R-Virginia)
H.R. 1675 — Sponsored by Representative Christopher Cox (R-California)
H.R. 1552 — Sponsored by Representative Christopher Cox (R-California)



 

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