E-Commerce Commission to Decide Sales Tax Question
3/21/00

The Advisory Commission on Electronic Commerce (ACEC) is expected today to finalize its recommendations to Congress on taxing Internet sales and Internet access. At least 13 of the 19 commissioners must agree before any formal recommendation can be sent to Congress, but some policy analysts think there is little on which 13 commissioners can agree.

In three previous meetings, commissioners were unable to find common ground on whether purchases made on the Internet should be subject to the same sales taxes bricks-and-mortar stores must charge. The commission, which has until April 21 to submit a report to Congress, opened its final face-to-face meeting in Dallas, TX, yesterday and spent the afternoon reviewing a number of proposals, including:

A proposal to permanently extend the current moratorium on any new Internet taxes of any kind, backed by Commission Chair James Gilmore, governor of Virginia. At present the moratorium is due to expire in October 2001.
A proposal to create a voluntary state sales tax system, supported by Utah Governor Michael Leavitt.
A proposal to set up a uniform sales tax system for all states, led by the National Governors Association (NGA).
A proposal to extend the moratorium for five years while the impact of e-commerce is studied. The so-called "Business Caucus" proposal, put forth by six commissioners representing big businesses involved in various aspects of e-commerce, would also eliminate sales taxes on digitized products and their non-digitized counterparts (including books, music, and software) while the moratorium is in effect.
A proposal, offered by Commissioner Grover Norquist, to eliminate all taxes on Internet access and sales of computers, set a ceiling for state and local sales taxes, and drop the telecommunications tax.

Last week the e-Fairness Coalition, a large group of major retail companies and nonprofit organizations, including NACS, initiated a calling campaign to the business representatives on ACEC, urging them to consider aligning with the voluntary sales tax plan espoused by Leavitt. The coalition does not support any extension of the moratorium and believes that the application of sales taxes should be consistent among retailers of all types, both online and offline.

The NACS Board of Trustees has also approved a policy in support of a level playing field for all retailers when it comes to sales taxes on educational products and materials.

More information on ACEC's final report to Congress will appear in the March 24 issue of CM Bulletin.

Related Links:

"E-Commerce Proposal Sweetened with Waiver of Book Taxes" (NACS, 2/10/00)
"NACS Joins Group to Voice Concern Over Web Sales Tax" (NACS, 2/2/00)
"E-Commerce Tax Panel Looking for Compromise" (NACS, 1/31/00)
"E-Commerce Commission: When in Doubt, Do Nothing" (NACS, 12/17/99)
"Groups Survey Consumers on Internet Sales Taxes" (NACS, 12/15/99)
"ACEC to Consider 14 Internet Sales Tax Proposals" (NACS, 12/8/99)
"NACS Presses for Equal Treatment on Web Sales Taxes" (NACS, 11/18/99)

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