The Advisory Commission on Electronic Commerce ended a two-day meeting in San Francisco unable to agree on whether sales over the Internet should be taxed.
The 19-member panel, appointed by Congress earlier in the year to study the issue, split sharply over a draft report that said the Internet should “not be subject to excessive taxes or government regulation.”
Virginia Gov. James Gilmore said the panel, which is to file its recommendations with Congress in early April, will vote on that issue and several others at its final meeting on March 20 and 21 in Dallas.
Nearly half of the panel’s members, mostly those representing various federal, state and local governments, reportedly want to recommend the adoption of federal legislation authorizing the taxing of Internet sales by state, county and local governments.
Throughout the two-day session, the panel heard arguments for and against the taxing of Internet sales.
National Governors Association chairman Utah Gov. Michael O. Leavitt called for another three-year moratorium on any federal legislative changes to the ability of states requiring out-of-state businesses to collect and pay taxes on sales over the Internet to their residents.
Legislation signed into law last year by President Clinton imposed a three-year moratorium on new Internet taxes by state and local governments.
The moratorium, under a 1992 U.S. Supreme Court decision, does not apply to sales taxes on Internet or catalog sales where the seller does not have a physical presence in the buyer’s home state.
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