The Congressionally-appointed Advisory Commission on Electronic Commerce may have delayed to March whether to recommend Internet taxes, but that doesn't mean the question of whether to tax the Net is going to go the way of Univac.
"There is much debate left to be done," says commission chairman Governor Jim Gilmore of Virginia to Conservative News Service. "E-commerce is a driving force of our economy and we shouldn't saddle it with new taxes."
Gilmore leads the anti-Net tax faction on the committee, while his fellow Republican, Utah Governor Michael Leavitt, leads the pro-Net tax faction. Leavitt claims states which have sales taxes are "entitled to their share of Internet transactions just like any other retail sale," CNS says, because "the rapid growth in Internet commerce without taxation threatens those states' tax revenue base."
"We're trying to teach people that we just want to collect taxes that are already on the books," Leavitt tells CNS, alluding to laws requiring those who buy on the phone or by mail order or the Net to pay their home state's sales tax - because the retailer isn't required to charge sales tax on out-of-state shipped goods.
Among Net tax opponents, Small Business Survival Committee president Chris Wysocki tells CNS collecting Net taxes will not only drive Net sales down but impose mountains of paperwork on retailers. But at least one economist, William Niskanen, tells CNS states might try to compensate for the lack of Net taxes by raising income or property taxes.
"At the state level, I rather favor the sales tax relative to the income tax," Niskanen says. "Exempting Internet sales erodes that whole sales tax base over time."
Not according to John Berthoud, who leads a critical taxpayers' rights group, the National Taxpayers Union. "There is absolutely zero justification for more taxes on the Internet," he tells CNS, saying it will hit lower income people harder. He's seconded by David Almasi, director of the African-American leadership group Project 21. "People are looking for goods and services and they are able to get them over the Internet," Almasi tells CNS. "Now the states are looking to come in and put on another surcharge."
