A congressional panel’s recommendation to extend the current ban on Internet taxes for five years is expected to be the main focus of a hearing next week by the Senate Commerce Committee.
On April 12 the panel is slated to hold a hearing on a bill from its chairman, Sen. John McCain (R-AZ), that would extend the existing moratorium on Internet taxes “through calendar year 2006.”
When McCain introduced his bill (S-2255), the Advisory Commission on Electronic Commerce-which Congress appointed nearly two years ago to develop a set of recommendations on how best to deal with the issue-was completing its work in Dallas.
Last week the 19-member panel, by a simple majority instead of the required “super majority vote of 15,” approved a report to Congress. The panel’s report recommended extending the Internet tax moratorium set to expire in October 2002 by five years; permanently banning Internet access taxes; eliminating the 3% federal excise tax on telecommunications; and the creation of a new advisory panel to develop standards leading to the simplification of existing state and local tax systems.
Although the panel was divided on the other issues, it unanimously recommended a “standstill” on international tariffs for Internet transactions.
Afterwards Virginia Governor James S. Gilmore (R), who chaired the panel, issued a statement that praised the panel for its work, saying it “provided a forum for presentation and discussion of all views [offering] valuable ideas, [and] was hugely successful in elevating the visibility of this key issue.”
S-2255, which McCain introduced on March 21, is one of three bills before the Senate on the subject. The others were introduced on Feb. 3, by Sen. Ron Wyden (D-OR) and on Feb. 7 by Sen. Bob Smith (R-NH). Similar legislation, introduced Feb. 3 by Rep. Christopher Cox (R-CA) is pending in the House. So far no hearings have been scheduled on any of those measures.
Meantime, in a letter to President Clinton, House Majority Leader Dick Armey (R-TX) blasted the three Administration representatives on the panel for not supporting the recommendations of its majority.
Telling the president that he and House Minority Leader Richard Gephardt (D-MO) agreed that since the three did not join the majority, it appears the administration “is opposed to keeping the Internet tax free.”
“It would have been nice to have had the Clinton/Gore representatives on board – their three votes would have provided a two-thirds super majority,” they said. They added that previously the Administration, as far back as 1998, endorsed the idea of keeping the Internet tax free. There was no immediate response to the letter from the president.
