So who cares whether an influential Congressman puts up a bill to make a temporary moratorium on Internet taxes permanent? You think that's stopping some of the nation's governors from trying to get their fingers in the cyber-cookie jar? Think again - the National Governors' Association has hit back with a proposed moratorium of their own.
At a Wednesday morning National Press Club gathering, the NGA recommended - we're not making this up, folks - "leveling the playing field for all businesses" by applying existing sales tax collection rules at "brick and mortar" stores to Internet purchases.
Utah's Republican governor, Michael Leavitt, is considered a leader in the struggle for Internet taxes - his state has already floated the idea as a way to recover certain interstate telecommunications costs. At the NPC, Leavitt called among other things for a three-year moratorium on any federal legislation changing the states' ability to collect taxes on companies doing business outside their borders.
But Leavitt did say the Internet itself should not be taxed. "It should be our practice," Leavitt said to the gathering, "to do all within reason to nurture and expand the Internet and adapt to the changes it produces. The Internet should not be taxed," he said. "That means no taxes, no bandwidth taxes, no byte taxes, no access taxes, and no multiple or discriminatory taxes on the net itself."
The NGA says governors are not proposing any new taxes on the Internet but, rather, taxes now being collected at real-life, physical businesses and stores should be collected from Internet stores and businesses, and mail-order purchases.
Are they singling out e-commerce for taxation? Of course not, the NGA insists. "The interest of the states is to ensure that every American is treated equally and that taxation is based on if they buy - and not how they buy and where they sell," the group said in a statement.
Not so fast, says the Citizens for a Sound Economy. They tell Conservative News Service that, while the NGA proposal is aimed at simplicity and fairness, its result will be multiple taxation at all levels.
"Each Internet sale will, in essence, be taxed three times: Once for the sales tax itself; once to pay for the collection of the tax by a trusted third party; and a final time, to offer incentives for retailers to enter the system," CSE says in a statement. "Consumers are hit time and again in the pocketbook in this over-reaching proposal."
