Author: Nonna A. Noto

Publisher:

Published: 2001

Total Pages:

ISBN-13:

The Internet Tax Freedom Act, enacted in 1998, placed a 3-year moratorium on the ability of state and local governments 1) to impose new taxes on Internet access or 2) to impose multiple or discriminatory taxes on electronic commerce. Numerous bills to extend the moratorium were introduced in the first session of the 107th Congress. The bills under active consideration during 2001 addressed two major sets of issues. The first centered on how long to extend the moratorium and whether to continue to grandfather existing taxes on Internet access. The second addressed the simplification of state and local sales and use tax systems and whether Congress was willing to signal support for the states' effort to have out-of-state sellers collect taxes on interstate sales. Some supporters of granting the states sales and use tax collection authority wanted no extension of the moratorium. Others wanted the extension to be long enough for the states to accomplish meaningful sales tax simplification, but not so long that public perception of the Internet as a tax-free shopping zone could become entrenched. Those skeptical of the ability of state and local governments to quickly agree upon and implement meaningful sales tax simplification favored a longer extension of 4 or 5 years.