By Jami Palmer
In the face of a slowing economy, legislators are giving a boost to E-commerce.
The U.S. House unanimously passed the Internet Tax Nondiscrimination Act last week, and it now awaits Senate approval.
The passage of the act provides an extension on moratorium access fees, new taxes and discriminatory taxes on the Internet until December 31, 2003.
The moratorium, which began in 1998, would have expired Oct. 21 had the House not voted to extend it.
The extension of the moratorium means more than 10,000 state and local agencies with taxing authority over the Internet will continue to be barred from taxing Internet access and subjecting buyers and sellers of electronic commerce to taxation, according to a news release.
Adam Elggren, legislative assistant to Congressman Jim Hansen, R-Utah, said the basic idea behind this moratorium is if a consumer purchases a product via the Internet in one state, he or she cannot be taxed by that state and also by the state he or she resides in.
“You just can”t tax them because it takes place over the net,” Elggren said.
Utah Representatives Chris Cannon, R-Utah, Jim Matheson, D-Utah, and Jim Hansen all voted to support the ITNA. Cannon was also a co-sponsor of the bill.
“American consumers and businesses need assurances that online commerce will not be burdened by a bunch of new and duplicative taxes,” Hansen said.
“This legislation should do that,” he added.
Cannon and Hansen, along with most Republicans in Congress, believe the New Economy should remain free from burdensome taxes and regulation.
The “New Economy” basically is a buzz-word for e-commerce, says Elggren.
With the economy being so fragile, Cannon strongly believes it is not the time to strike a blow to e-commerce sector.
“Raising taxes on the Internet is not a viable solution to the dot com crash,” Cannon said.
Rather, Cannon believes the answer is to cut spending at government levels.
Hansen also joins with Cannon on this view.
“Our economy is struggling to overcome the tragic events of September 11, and the ensuing slowdown,” Hansen said. “Now is not the time to be exacting new taxes.”
Hansen also feels e-commerce growth has been benefited the job market.
“The tremendous growth of e-commerce has created thousands of jobs in this country and led to countless new choices for Utah consumers,” Hansen said.
Cannon expressed sympathy to retailers and state and local authorities struggling with their own economies.
“I simply cannot support any new tax,” Cannon said. “If a level playing field is the goal, then let”s start cutting taxes for other sectors until parity is reached.”
Hansen said he encourages his colleagues in the Senate to “act quickly to extend the moratorium.”