-Caveat Lector-

Congressman supports Internet tax
By Bloomberg News
Special to CNET News.com
March 12, 1999, 2:40 p.m. PT
WASHINGTON--U.S. states and local governments have a right to tax business
conducted over the Internet, according to Rep. W.J. "Billy" Tauzin
(R-Louisiana).

Consumers don't pay sales tax on most goods and services they purchase online,
similar to mail-order purchases, although they do on most over-the-counter
purchases. A 19-member commission is debating the thorny issue of how to tax
business on the Internet.

Congress banned new taxes on Internet business for three years while policy
makers work on the problem.

"I don't think we can stop state and local governments from demanding their
share of contributions in the form of taxes, comparable to what would be
required of brick-and-mortar businesses in their jurisdiction," Tauzin said.

Tauzin also said that Congress mustn't permit undue taxation that could stunt
the growth of Internet business. "Our job is going to be to make sure there's
no duplication of taxation," Tauzin said.



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Tauzin will play QUOTE SNAPSHOT
March 12, 1999, 1:41 p.m. PT
America Online Inc. AOL
96.1250 +0.3125  +0.33%
Amazon.Com Inc. AMZN
133.3125 -1.5625  -1.16%

by symbol  by name

> more from CNET Investor
Quotes delayed 20+ minutes
an important role in the upcoming congressional debate over Internet taxation,
because he heads the influential House Commerce Subcommittee on
Telecommunications, Trade, and Consumer Protection.

The debate won't occur until next year at the earliest, when the Internet tax
commission will report to Congress.

Thus, it's a little early to tell what direction lawmakers will take, said
Bill Whyman, an Internet analyst with Legg Mason's Precursor Group. Still,
Tauzin, as chairman of the House subcommittee, "is a central player in all of
this," he said.

State and local officials worry that they'll lose sales taxes as the Internet
grows.

The tax debate pits companies specializing in e-commerce, such as bookseller
Amazon.com and catalog sales company J. Crew, against small local merchants
and large department stores.

The newly formed Internet tax commission already faces obstacles. The National
Association of Counties filed a lawsuit this week to block the panel from
meeting, saying that its makeup is illegal. By law, the panel is supposed to
be composed of eight industry representatives, eight state and local
officials, and three federal officials. State and local officials say there
are too many industry representatives, among them America Online president
Robert Pittman, and not enough from state and local government, such as Utah
Governor Mike Leavitt.

Copyright 1999, Bloomberg L.P. All Rights Reserved


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