President Clinton and the nation's governors have reportedly agreed to postpone state Internet tax legislation, but the President also promised the governors he would consider ways to make up for "lost tax revenues" in return.
The President and the National Governors Association met at the latter's winter meeting in Washington, where NGA chairman Gov. Michael Leavitt (R-Utah), the leading gubernatorial supporter of Net taxes, said the governors and the President agreed that brick-and-mortar and cyber-retailers needed "a level playing field…
"There is a point in the life of every problem where it's big enough to see it and small enough to solve it," Leavitt added, saying it was too soon to know if a Net sales tax would be a viable tool - a considerable backtrack from his former staunch support of taxing the Net.
Leavitt - whose support of Net taxes had put him at loggerheads with his fellow Republican governor, Jim Gilmore of Virginia - even predicted Congress would introduce Net tax legislation this spring but take no action on it this year. The Advisory Commission on Electronic Commerce, of which Leavitt is a member and Gilmore the leader, is expected to hand up a final recommendation by April.
But the informal agreement between the governors and the President would seem to mean read their lips: no Net taxes this year, anyway.
One of the key pressure points seems to have come from California Gov. Gray Davis, a Democrat, who urged his fellow state executives to wait and see how the cybereconomy develops, according to Conservative News Service. "If in doubt, do no harm," Davis told the group. "Let's let the technology ... grow another two or three years before we decide what we're going to do."
