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news
More taxes on
Internet
By Jamillah R. Gabriel
On-line Forty-Niner
The Internet Tax
Freedom Act, a moratorium that bans discriminatory taxation
of the Internet and Internet access, expired Sunday while
Congress continues to debate its renewal.
Originally authored
in 1998 by Rep. Christopher Cox, R-Calif., and Sen. Ron Wyden,
D-Ore., the act placed a ban only on new taxes for three years.
"It banned
discriminatory tax, so the Internet was not tax free,"
said Jennifer Holden, executive vice president of NoInternetTax.org,
an advocacy organization whose mission is to protect the Internet
from taxation.
A discriminatory
tax is any before the act went into place.
As it stands, the
Supreme Court ruled that states do not have the right to collect
taxes from businesses that do not have a physical presence
in their state.
"This inability
to collect taxes on remote sellers could cost states billions
of dollars," said Jason Feuchtwanger, public information
officer of the National Governor's Association. The association
believes that streamlined taxes are the solution to this potential
problem.
The governor's
association, whose members include governors of the 50 states,
three territories, and two commonwealths, is spearheading
the Streamlined Sales Tax Project which would give states
the authority to require remote sellers to collect and remit
sales and use sales taxes, Feuchtwanger said.
Now that the act
has expired, state legislatures are free to levy any taxes
they want, according to Holden. She said there is no immediate
threat, as there are only four state legislatures in session
at this time, but some states have already passed some legislation.
Congress has been
stalled in negotiations since May and still have not agreed
on the terms of the renewal of the act. Negotiations have
been held up partly because of the efforts of the National
Governor's Association to streamline taxes on the Internet,
according to the NoInternetTax.org Web site.
"Four out
of every five states are willing to simplify their systems
and dramatically reduce the complexity and cost of all sellers,"
said John Engler, governor of Michigan and vice chair of NGA.
Congress has yet
to approve these streamlining proponents. "In a week
or two, they should be bringing something to the floor,"
Holden said.
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