It was set up by Congress to study and make recommendations on Internet sales taxes - but it now appears the Advisory Commission on Electronic Commerce will not agree on a proposal to extend the current Net tax moratorium by its April deadline.
"It's unclear whether or not the commission will come up with a delineating document," Utah Gov. Michael Leavitt tells The Standard following a conference at Oracle headquarters here. "It's possible, but not likely."
Leavitt had been the staunchest advocate of Internet sales taxes on the commission, and that stance pitted him against his fellow Republican, Virginia Gov. Jim Gilmore, who chairs the commission and leads its anti-Net tax faction. That division has run deep since the commission was formed in 1998 - when Congress first imposed a three-year Net tax moratorium.
Leavitt says there is now no national consensus on Net taxes. He had maintained they were necessary because falling brick-and-mortar sales equal falling tax revenues for states as the Internet shopping world grows rapidly. But at the end of February, the National Governors Association, which Leavitt chairs, agreed with President Clinton to postpone state Internet tax legislation, reportedly in return for an agreement from the President to consider ways to make up for "lost tax revenues."
However, Leavitt still maintains the real issue is a level playing field between the brick-and-mortar commerce world and the Internet. "Are we going to create a permanent exception for one group and tell them they won't have to pay for our schools, our roads and our justice system?" he says to The Standard.
Gilmore favors a permanent ban on Net sales taxes. Leavitt believes four out of five of his fellow governors support some form of a Net sales tax. Another Net tax opponent is California Gov. Gray Davis - who leads perhaps the most Internet-friendly state in the nation and maintains the Net creates more wealth for California without taxes.
