[Congressional Record Volume 144, Number 9 (Tuesday, February 10, 1998)]
[Senate]
[Page S589]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                        INTERNET TAX FREEDOM ACT

 Mr. LEAHY. Mr. President, I rise today to add my support to 
promoting electronic commerce and keeping it free from new Federal, 
State or local taxes. I am pleased to cosponsor the Internet Tax 
Freedom Act, S. 442, as it was reported out of the Senate Commerce 
Committee.
  In ways that are becoming increasingly apparent, the Internet is 
changing the way we do business. More than 30 million people around the 
world surf the Net. And more and more of these users turn to the World 
Wide Web and Internet to place orders with suppliers, sell products and 
services to customers, communicate with clients and market products.
  This Internet market is growing at a tremendous pace. Over the past 
two years, sales generated through the Web grew over 5,000%. And 
according to one Internet research firm, Net merchants are expected to 
sell $6.6 billion worth of goods by the year 2000.
  The growth of electronic commerce is everywhere, including my home 
state of Vermont. On my home page on the Web, I have put together a 
section called ``Cyber Selling In Vermont,'' which is a step-by-step 
resource guide for exploring on line commerce and other business uses 
of the Internet. It includes links to businesses in Vermont that are 
already cyber selling. As of today, this site includes links to Web 
sites of more than 100 Vermont businesses that are doing business on 
the Internet, ranging from the Quill Bookstore in Manchester Center to 
Al's Snowmobile Parts Warehouse in Newport.
  As electronic commerce continues to grow, I am hopeful that we in 
Congress will be leaders in developing tax policy to nurture this 
exciting new market. That is why I have closely followed the Internet 
Tax Freedom Act since Senator Wyden introduced it last summer. I want 
to commend the senior Senator from Oregon for his leadership on cyber 
tax policy.
  During my time in the Senate, I always tried to protect the rights of 
Vermont state and local legislators to craft their laws free from 
interference from Washington. Thus, the broad, open-ended moratorium on 
state and local taxes relating to the Internet in the original bill 
gave me pause. I certainly agreed with the goal of no new state and 
local taxation of online commerce, but the means were questionable.
  I believe those questions have been fully answered by the changes 
made to this legislation during its consideration in the Senate 
Commerce Committee. I want to commend Senators McCain, Wyden, Burns and 
Kerry for crafting a substitute bill that protects the free flow of 
online commerce while accommodating the rights of state and local 
governments. In particular, I am pleased that the revised legislation 
adds an end date of January 1, 2004 to the moratorium and clarifies the 
list of state and local taxes that are grand fathered under it. The 
addition of state tax organizations to the Presidential task force to 
develop long-term Internet tax policy also makes good sense.
  Mr. President, I am proud to cosponsor the Internet Tax Freedom Act 
to foster the growth of online commerce and will work hard for its 
swift passage into law.

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