06:00 PM ET 09/29/98
Firm U.S. Senate support seen for Internet tax curb
WASHINGTON (Reuters) - Legislation to curb state and local
taxes on the Internet received strong Senate support in a test
vote Tuesday but a Florida lawmaker blocked debate on the bill
which could return later this week.
By 89-6 the Senate backed a motion to proceed with the
measure that would keep the taxman out of cyberspace while the
question of when, or how, to tax the Internet is studied.
An objection from Florida Democrat Sen. Bob Graham prevented
the bill from being debated Tuesday but Senate Commerce
Committee Chairman John McCain vowed to seek another vote
Thursday.
Opponents of Internet taxation say charges, such as Internet
access taxes, e-mail surcharges and other levies, could choke
off growing business use of the web.
But some states and cities worry that fast-growing on-line
commerce is eroding their finances by avoiding traditional
taxes.
McCain said Graham was clearly thwarting the majority of the
Senate. ``We're growing weary of this,'' the Arizona Republican
said. ``It's time we saved this critical technology which is
absolutely vital to the future of this nation.''
But Graham said the Senate was rushing toward a law that
would favor Internet sellers over local retail businesses and
put a major hole in state and local revenues.
Graham and eight other Senators sent a letter to Senate
Majority Leader Trent Lott Tuesday urging him to ensure the
advisory commission in the final bill was directed to examine
the issue of remote selling.
The House has already passed a three-year moratorium on new
Internet charges that would exempt states with web taxes already
in effect.
During committee review of the bill the Senate Commerce
Committee sought a six-year moratorium on web charges but the
Finance Committee reduced that to two years.
Aides said negotiations were underway on an amendment McCain
would offer on the Senate floor that could bring the bill into
line with the House's three-year ban.
The amendment would also likely exempt some states that
already have Internet charges in place, a feature of the House
bill.
Companies with on-line business interests in Florida were
attempting to reach Graham to express their disappointment with
his opposition to the bill.
Brokerage firm Charles Schwab said it had a data center in
Orlando, Fla., where most of its East Coast telephone and
Internet-based transactions were routed. Schwab had 100,000
customers in Florida alone.
``We're very concerned with Senator Graham's position on
this,'' said Frank Kelly, Schwab vice president for government
affairs. ``We're already taxed, we just don't want to see new
taxes added and he doesn't seem to want to address that issue.''
^REUTERS@
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