[Congressional Record Volume 146, Number 57 (Wednesday, May 10, 2000)]
[House]
[Pages H2787-H2821]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INTERNET NONDISCRIMINATION ACT OF 2000
The SPEAKER pro tempore (Mr. LaHood). Pursuant to House Resolution
496 and rule XVIII, the Chair declares the House in the Committee of
the Whole House on the State of the Union for the consideration of the
bill, H.R. 3709.
{time} 1115
In the Committee of the Whole
Accordingly, the House resolved itself into the Committee of the
Whole House on the State of the Union for the consideration of the bill
(H.R. 3709) to make permanent the moratorium enacted by the Internet
Tax Freedom Act as it applies to new, multiple, and discriminatory
taxes on the Internet, with Mr. Sununu in the chair.
The Clerk read the title of the bill.
The CHAIRMAN. Pursuant to the rule, the bill is considered as having
been read the first time.
Under the rule, the gentleman from Illinois (Mr. Hyde) and the
gentleman from Michigan (Mr. Conyers) each will control 30 minutes.
The Chair recognizes the gentleman from Illinois (Mr. Hyde).
Mr. GEKAS. Mr. Chairman, I ask unanimous consent that I may claim the
time designated to the gentleman from Illinois (Mr. Hyde) as the
proponent of the bill.
The CHAIRMAN. Is there objection to the request of the gentleman from
Pennsylvania?
There was no objection.
Mr. GEKAS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, in the 105th Congress, we passed a piece of legislation
that led to this day. The purport of that Internet Tax Freedom
legislation of that Congress denoted that a study would have to be
performed in order to determine the future of our new world of
Internet.
One of the strongest recommendations made by the commission, the
report to Congress being embodied in this beautiful blue book which I
now place before the Chair, one of the strongest commendations there
and recommendations was for the extension of the moratorium that the
first bill, the one to which I just alluded, included and which does
not expire now until October 1, 2001.
The extension of the moratorium then is the core of the bill that is
before us. It calls for a 5-year extension of the current moratorium.
Why? Because that is what the commission recommended. Why did they
recommend it? Because they were split on what different facets of the
Internet world are going to carry with respect to access charges and
all the other complexities having to do with Internet interstate
commerce.
So the best of all worlds is to give the Congress and industry and
business and telecommunications, to give them all time to sort this
out.
Mr. Chairman, one thing that should be said to clear up things in
anticipation of the debate that is to follow, this does not impact
sales taxes as they now exist across the Nation. What we are talking
about is a moratorium on Internet access charges, more than any other
single facet of what is happening in the Internet world.
What might happen to sales taxes and other problems that are fomented
at the outer edges of the Internet world will be topics of hearings
that we will be conducting in the Committee on the Judiciary in the
weeks to follow, even in this session.
So we are going to cover all the complexities that exist in this
whole new world of exchange. But in the meantime, we are pressing for
the main stem of this bill, which is a moratorium to extend 5 years
beyond the current one.
Mr. Chairman, I reserve the balance of my time.
Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, this measure, the Internet Nondiscrimination Act, is
not really what it seems, because it merely addresses the most trivial
of the Internet tax issues, the extension of the tax moratorium, and
kicks the can down the road, so to speak, on the real issues, State
simplification and the defining of what activity creates the necessary
nexus for sales tax under the Supreme Court decision in Quill rendered
in 1992.
By extending the current moratorium for 6 years, more than two
presidential elections from today, there is far less of an incentive
for the States and Congress to deal with these far more important
simplification issues. Indeed, there is a real risk that by 2006, many
interests will become so dependent on the current system that it will
become impossible to ever revisit the issue of State tax
simplification.
There can be no doubt that the present State system, which this
legislation totally ignores, is a serious problem. First, the
complexity of the system is daunting. There are over 6,500 taxing
jurisdictions in this country. The jurisdictions generally require
[[Page H2788]]
separate collection, have developed overlapping definitions of goods
and services subject to tax, specifying different sets of exemptions
and audit systems.
Any retailer with a physical nexus to a State is subject to a myriad
of confusing and complex State and local taxes.
The second point that needs to be made is that the legal uncertainty
of the present system can be quite harmful, even for remote sellers
because of the many questions left unresolved in the Quill decision.
For example, would the mere presence of a computer server in a
particular State constitute a substantial physical presence for State
tax purposes? I do not know. How are purely electronic sales of books,
movies, and sound recordings to be treated? We are not sure. Would the
existence of a kiosk to place sales ordered through the Internet or a
physical return facility constitute the type of physical nexus needed
to establish sales tax collection authority? Who knows?
All of these issues can and should be addressed as a part of a
comprehensive tax simplification effort, yet this will be far less
likely to occur if we extend the present system to 2006.
I would also note that the process by which the bill has been
considered is neither serious nor credible. There have been no
Committee on the Judiciary hearings to obtain input from the interested
or affected parties. Instead, our markup was scheduled on one day's
notice, the bear minimum required under the House and committee rules.
This bill has been rushed to the floor waiving House rules specifying
a 3-day layover requirement and against unfunded intergovernmental
mandates.
So in my view, the entire process appears to have been more the
result of partisan political considerations than sound policy, because
why else would the Majority Leader announce the legislation is slated
for floor consideration before the committee had heard from a single
witness, or even scheduled a subcommittee full markup?
The majority appears to be using this legislation in a desperate
effort to create the appearance of a serious high-tech agenda, even
while they postpone and defer considerations of the larger issues.
It is ironic that the majority could claim to be a champion of the
tax-free Internet at the same time that the chairman of the Committee
on Ways and Means is proposing a new 30 percent Federal tax on sales
transactions, including all electronic sales consummated over the
Internet.
Later today, I will plan to support the Delahunt-Thune amendment,
which extends the moratorium until the year 2003. Now, this approach
will keep pressure on the Congress to deal with the more pressing
problems of E-commerce and ensure that taxing authorities are not
creating too many unwise toll booths on the Internet highway.
Mr. Chairman, I reserve the balance of my time.
Mr. GEKAS. Mr. Chairman, I yield 3 minutes to the gentleman from
Florida (Mr. Foley).
Mr. FOLEY. Mr. Chairman, sometimes I am not certain around here
whether we are making progress or not, but we certainly are working on
a very, very important issue. The other side, the minority, at times
criticizes us for not working enough. Yet, today we are being accused
of rushing legislation to the floor. I disagree with that viewpoint.
I think we are all aware of the Internet and its importance to the
country. I think if we look at the record, Republicans have, in fact,
been stalwart leaders in trying to bring the Nation as a whole into the
Internet economy.
Mr. Chairman, I rise in support of H.R. 3709, the Internet
Nondiscrimination Act. The Internet is the engine that has fueled this
massive expansion in our Nation's economy. This is the ``Internet Age''
and America is leading the way in innovation and development of this
vital sector of our economy.
This bill is important because it tells the government: ``Keep your
hands off the Internet.'' All too often we have seen the Federal
Government stifle innovation and new technologies through heavy
taxation and overburdensome regulation. We could cite the Justice
Department's heavy hand in the Microsoft case, which is obviously
causing serious tremors on Wall Street and is causing millions of
Americans to lose a substantial part of their retirement savings
because the equity values have been driven down because of the fear
that innovation and technology improvements to society will be
challenged by this Justice Department.
This bill will prevent States and localities from imposing access
charges to the Internet. Many in this Chamber have received calls and
letters from our constituents urging us not to tax the access to the
Internet. This is in response to those thousands of e-mails and letters
we have received from our constituents.
Allowing every taxing authority across the country to tax access to
the Internet is the quickest way to destroy it, and certainly that is
something that no one here wants.
I am concerned, however, about the effects this bill will have on the
ability of States to collect sales tax revenue. My State of Florida is
heavily dependent on sales tax receipts, as it does not have a State
income tax. And I congratulate our State for not having an income tax.
Mr. Chairman, please understand, I do not favor taxes, sales or
otherwise, that discriminate against the Internet. I supported the 1998
Internet Tax Freedom Act because I felt it was important at the time to
give the Internet some room to grow absent the heavy hand of
government. However, today we are facing a situation where businesses
in my district and all across America are being discriminated against.
If a person can evade sales taxes by making a purchase on-line, the
small business on the street corner that sells that same product will,
in fact, suffer.
The Internet is now thriving, and it is unfair to continue an unlevel
playing field which gives Internet companies an advantage over the
``brick-and-mortar'' corner stores all across America. It is my hope
that we can reach a compromise on this particular issue; however, I
support the main intent of this bill, which is preventing the taxation
of Internet access.
Mr. Chairman, I congratulate the gentleman from Pennsylvania
(Chairman Gekas) for his leadership.
{time} 1130
Mr. CONYERS. Mr. Chairman, I yield 4 minutes to the gentleman from
New York (Mr. Nadler), who is the ranking member on the Committee on
the Judiciary.
Mr. NADLER. Mr. Chairman, today we consider a matter of vital
importance to our Nation's future: how to nurture the development of
the Internet commerce; how to provide a clear and predictable
environment for e-commerce, free from multiple and discriminatory
taxes, while at the same time protecting our local communities which
need revenues to fund schools, to fund emergency services, such as fire
and police, and hospitals, and so forth.
I take that balance very seriously. In New York Silicon Alley, which
I am proud to represent, emerging high-tech firms are on the cutting
edge of the new economy. They provide a vital new engine for economic
growth and innovation. We need to foster that innovation and ensure its
future.
For that reason, as the ranking member on the subcommittee, I took a
leading role in seeking enactment 2 years ago of the Internet Tax
Freedom Act, which provided for a moratorium on various taxes on the
Internet and established a commission to recommend a rational, fair and
predictable system of taxation that placed e-commerce on an equal
footing with similar businesses.
The purpose was to ensure that the new economy not be stifled by
multiple or unfair or discriminatory taxes, and that economic decisions
in the private sector, insofar as possible, be made on economic, not
tax avoidance grounds so as to maximize economic efficiency
productivity, growth and fairness.
Mr. Chairman, unfortunately, the commission dropped the ball and
could not agree on any approach. Rather than taking the time to deal
with this important responsibility ourselves, we are faced today with a
rushed piece of legislation that extends the moratorium, but fails to
address the important questions of fair, nondiscriminatory taxation
that will protect the new economy for multiple taxes, discriminatory
taxes and other unfair burdens that could undermine the ability of the
Internet to grow, prosper and
[[Page H2789]]
continue as an engine for economic growth.
In fact, as was mentioned, the bill was rushed through the Committee
on the Judiciary so quickly, on orders from the House Republican
leadership, that we will not have time to hold any hearings until next
week, after this vote is taken. First you vote on the bill, then you
have hearings to find out what you are talking about. Is that any way
to deal with something this important? Shoot first and ask questions
later?
Are we doing e-commerce or our communities any favors by acting so
rash and irresponsible a manner? There are 16 months left in the
current tax moratorium. I think we could have taken a day or two to
hear from the industry and other interested parties and experts to
craft more comprehensive legislation before voting.
It did not have to be this way. Instead of pushing through a bill
that will not provide predictability and long-term protection for e-
commerce that ducks the major issue, Congress today punts by simply
extending the moratorium and dodging the important questions.
These issues will not go away. State and local governments will need
clear rules on what they can and cannot tax. E-commerce companies will
need to know what their future situation will be. Main Street
businesses need to know that they will not be placed at a competitive
disadvantage. If we fail to address these issues, as this bill does, we
may very well face years of complex and costly litigation before the
courts straighten it out.
But we are not doing that today, we are voting on a press release
today instead of legislation that would take some responsibility for
the future of the Internet.
We need to deal with the sales tax issue, the nexus issue and the
access issue once and for all. We do no one any favors by avoiding the
hard questions as this bill does. That future is too important to play
politics with. While I am disappointed with the incomplete legislation
we have before us today, I am also determined to move the process
forward in the hope when the time comes to vote on a conference report,
the bill will address these important issues.
Mr. Chairman, I will vote for this bill today, knowing it is a
terribly flawed product, hoping that before we have a conference report
it will deal with the issues we are dodging today. If the conference
report does not, a lot of us will have a lot of difficulty supporting
such a flawed product.
Mr. GEKAS. Mr. Chairman, I yield 2 minutes to the gentleman from
Illinois (Mr. Weller).
Mr. WELLER. Mr. Chairman, I rise in support of this important
legislation. Let me share some interesting statistics with my friends
and colleagues. One-third of all economic growth today results in the
new economy based on technology. High-tech wages are 77 percent higher
on average than the other private sector jobs; 37 million Americans
access the Internet every day. Clearly, the new economy offers great
opportunity for all Americans.
Mr. Chairman, I am proud to say that Illinois is a high-tech State.
Illinois ranks fourth today in technology employment. We rank third in
technology exports. This issue is important to the people of Illinois,
and it is a simple bill. We are just saying, no new taxes on e-
commerce. No new taxes; pretty simple message.
The U.S. Department of Commerce estimates that the number of new
websites and Internet users doubles every 100 days. This issue is
whether or not we impose any new taxes on Internet and e-commerce
sales.
Let us remember traditionally that government has always been very
creative in finding new ways to tax. We are just saying no new taxes.
At a time when the new economy is growing so strongly, creating one-
third of all the new jobs, we want to keep it growing. I am proud that
Illinois has been leading the way. I am proud that Illinois made the
statement 2 years ago that it will not tax Internet access charges
subjecting them to the State's sales tax, the telecommunications tax.
Illinois has already led the way, and we are following the lead of
States like Illinois, because Illinois wants a growing new economy. The
new economy is growing today because we have a simple agenda here in
this Congress. The majority wants a tax-free, regulation-free, trade
barrier-free new economy and because of that, it is growing, creating
new opportunity for millions of Americans.
There is no excuse for delay. We are hearing lots of excuses because
some people want to tax the Internet. No more excuses; no new taxes. No
new taxes on the economy. Let us vote aye.
Mr. CONYERS. Mr. Chairman, I yield 3 minutes to the distinguished
gentleman from North Carolina (Mr. Watt), a member of the subcommittee.
Mr. WATT of North Carolina. Mr. Chairman, I thank the ranking member
of the Committee on the Judiciary for yielding me the time.
Mr. Chairman, let me be clear that I originally supported the
appointment of a commission and the original moratorium, because I
thought the whole issue of how we tax Internet sales was a very, very
complicated issue which had substantial implications for commerce, as
well as substantial implications for local governments and their
ability to support initiatives at the local level.
I thought that we could not in the Committee on the Judiciary make a
quick judgment about how to create a level playing field between brick
and mortar stores and e-commerce sales.
The Commission has failed in my estimation, and I think we do need
some kind of extension of the moratorium. I do not think that 5 years
is an appropriate extension. I think it is way too long to extend this
moratorium, because what we have in addition, related to the moratorium
itself, is a companion issue which deals with how we create a level
playing field between retailers and other businesses that are operating
in brick and mortar stores and people who are selling over the
Internet.
Right now, brick and mortar stores are at a competitive disadvantage
because they have to collect local sales taxes. In many cases, e-
commerce is able to evade those local sales taxes, and that puts brick
and mortar stores at a competitive disadvantage.
So if we are going to create a level playing field for both e-
commerce and brick and mortar local retailers, we need to deal with how
we do that at the same time we deal with the extension of the
moratorium. To delay how we create that level playing field for 5 or 6
more years, actually 6 more years, not just the 5-year extension,
because this 5-year extension does not pick up until a year from now,
we are talking about a 6-year extension of a moratorium that really
puts in place an unlevel playing field for that 6-year period.
I think that is terribly unfair to our existing brick and mortar
stores in our communities. It is terribly unfair to local governments
who rely on the ability to tax to support their activities.
So I hope my colleagues will oppose this bill and support the
Delahunt amendment.
Mr. GEKAS. Mr. Chairman, I yield 1 minute to the gentleman from Ohio
(Mr. Boehner).
Mr. BOEHNER. Mr. Chairman, the beauty of the Internet economy is that
there is almost no limit to what one can accomplish if one has access
to it. E-commerce offers every citizen the chance to be an entrepreneur
and to pursue the American dream. It puts David on a level playing
field with Goliath, giving the smallest mom and pop business the
opportunity to reach the same customers as the industry giants.
Our responsibility as elected leaders is to knock down any barrier
that unfairly denies Americans the chance to participate in this new
economy, whether it is access charges or double taxation of on-line
purchases or the ancient sales and use tax laws that some want to
resurrect for Internet sales.
The measure before us would provide a 5-year extension of the
moratorium on new taxation of the Internet. This moratorium is
America's first line of defense against unnecessary government
intrusion in the new economy. It is essential to preserving the
evolution of the Internet and making it accessible to every citizen.
Mr. Chairman, no one can say with certainty where the Internet will
lead us or which opportunities it will yield. But we do know the
Internet is working for America, and we know it is that freedom that is
what is making the Internet work.
[[Page H2790]]
I urge my colleagues to support this bipartisan bill.
Mr. CONYERS. Mr. Chairman, I yield 3 minutes to the gentleman from
Massachusetts (Mr. Delahunt), a member of the Subcommittee on
Commercial and Administrative Law. No one has worked harder on this
than him.
Mr. DELAHUNT. Mr. Chairman, last year, in 1999, State and local
governments lost $525 million in anticipated sales tax revenues on e-
commerce or so-called Internet sales. Researchers from the University
of Tennessee estimate that on-line sales will grow to $200 billion by
2003. Unless there is a system that is in place that enables the States
and local governments to require out of State merchants to collect
taxes on their sales to in-State residents, they will lose more than
$20 billion annually by 2003.
This chart on my right lists all 50 States in their projected sales
tax revenue losses for the single year of 2003. Some examples are
instructive. Florida will lose $1.4 billion in sales tax revenue. Texas
will lose more than $1.7 billion in revenue.
It is important to note, by the way, that Florida relies upon the
sales tax for 57 percent of its total revenue, and Texas relies upon
the sales tax for 51 percent of its total revenue.
It is easy to imagine how these kinds of losses affect a State or
local government's ability to provide for basic services such as police
and fire protection or a viable educational system. They will either be
compelled to cut back these services or more likely raise income taxes
and/or property taxes. No way will this underlying bill cut taxes. It
is important to be clear about that. At best, it will only shift them.
Now, how do we get to this point, where the States are forced to deal
with ever-increasing shortfalls in anticipated sales tax income? Well,
in 1992, the Supreme Court ruled that a State could not compel an out-
of-State business to collect the sales tax for a product or service
sent into that State. This inability to collect from out-of-State
merchants coupled with the dramatic but very recent explosive growth of
e-commerce has created a serious fiscal problem for State and local
governments.
Furthermore, this issue is not just about declining sales tax
revenues to State and local governments, it disadvantages small
business as well. Those merchants in our neighborhoods and communities
that make up our local Chamber of Commerces, how can they compete when
there is no sales tax parity.
{time} 1145
One can imagine deserted shopping malls and empty storefronts
downtown. The digital divide should not be extended to American
business or to those who patronize them. We will have two classes of
American consumers and two classes of American business and no level
playing field for either.
The States understand these issues, and by their own initiative, have
formed the so-called streamlined sales tax project. Let us leave it to
the States.
Mr. Chairman, later on, I will submit an amendment that will reduce
the 5-year underlying proposal to 2 years.
Mr. GEKAS. Mr. Chairman, I yield 4 minutes to the gentleman from
Virginia (Mr. Goodlatte).
Mr. GOODLATTE. Mr. Chairman, I thank the gentleman for yielding me
this time.
Mr. Chairman, this sales tax debate is very interesting. In fact, we
are going to continue that debate with hearings in the Committee on the
Judiciary soon. But as far as this legislation today is concerned, it
is nothing more than a red herring attempt to divert the attention of
this Congress and the American people from the task we have at hand
today, which is to protect folks like the young students that were at
our E-contract 2000 press conference with the majority leader a little
while ago, who themselves, 15-year-old kids, said do not put taxes on
access to the Internet.
That is what this bill is about, keeping some of the most unfair,
most regressive taxes, taxes that hurt the lowest income Americans from
being imposed on the Internet and denying those people the opportunity
to participate in the information age, the educational opportunity, the
opportunity to shop on-line. When we allow States or other entities to
impose those taxes, they hurt the lowest income people the most, but
they hurt the Internet, which is benefitting the United States as well.
It is vitally important that we take a very, very cautious approach
towards allowing taxes of any kind on the Internet, because the
Internet is the engine causing our economy to grow. Nearly half of the
growth in our economy is attributable to the high-tech industry, and
the Internet is the engine that is driving that growth.
We have, so far, been very successful in encouraging 135 nations
around the world, members of the World Trade Organization, from
restraining this impulse to put more and more taxes onto the Internet.
And that is what we are trying to do today, is to set an example for
the States, but, even more importantly, for the rest of the world; that
as this economy grows, we not tax it to death.
There is a saying here in Washington that when government sees
something moving, they try to regulate it to death. If it keeps moving,
they try to tax it to death. And then, of course, if it stops moving,
well, then they subsidize it. That is not the model for the Internet.
We have been able to keep it free of taxes, we need to continue in that
direction.
This is a great first step in that direction, and I urge my
colleagues to reject amendments that would shorten this extension of
the moratorium of 5 years and to reject amendments that would eliminate
the provisions in this bill that take out the grandfathered States.
Let us be fair to everybody and let us reject the idea that this has
anything to do with the States collecting their sales taxes. It does
not. It is simply a way for us to protect American citizens from unfair
and discriminatory taxes on the Internet.
I urge my colleagues to support this legislation and reject these
amendments that are going to be offered.
Mr. Chairman, I submit the following letter to the Speaker from the
Governor of Virginia in the Record:
Commonwealth of Virginia,
Office of the Governor,
Richmond, VA, May 9, 2000.
Re: H.R. 3709
Hon. J. Dennis Hastert, Speaker of the House of
Representatives, Office of the Speaker, House of
Representatives, Washington, DC.
Dear Speaker Hastert: Thank you for your efforts in moving
H.R. 3709 to a floor vote tomorrow. You and Majority Leader
Armey are to be commended for the leadership you have
demonstrated in moving the Advisory Commission on Electronic
Commerce's recommendations from concept to swift legislative
action. The people of the United States can be proud of your
efforts on their behalf.
Please extend to your colleagues in the House my
encouragement to vote for H.R. 3709 in its current form.
Congressman Cox and Congressman Goodlatte have crafted a bill
that will protect millions of women and men who use the
information from unfair and discriminatory tax burdens and
from taxes on their monthly Internet access charges.
The extension of the moratorium against ``multiple and
discriminatory'' taxes targeted at the Internet is necessary
to protect the Internet from tax and regulatory burdens that
will inhibit full growth of the Internet. In the words of
President Reagan, ``The government's view of the economy
could be summed up in a few short phrases: If it moves, tax
it. If it keeps moving, regulate it. And if it stops moving,
subsidize it.'' What's moving in the Internet Economy are
bits and bytes and electrons of Internet through cables and
wireless satellite connections--and the moratorium presented
in H.R. 3709 is necessary to protect government's inherent
appetite for more revenues even during times, such as we
enjoy today, of economic plenty.
The prohibition against taxes on monthly Internet access
fees is necessary to reduce the financial burden on working
men and women and families who want to log on the Internet.
This is crucial for several reasons. First, America's policy
should be to encourage all Americans to log on the Internet
and empower their lives with access to all of the social,
educational and economic opportunities located on the world
wide web. Second, a prohibition against taxes on Internet
access would reduce the price of Internet access and thereby
help close the ``digital divide.'' Third, Americans already
pay a tremendous tax load to log on the Internet because of
the taxes they pay on telephone and cable lines they use to
connect to the Internet.
Moreover, these basic tax protections are necessary if the
people of the United States are to realize all of the social
and economic benefits promised by the Internet and if the
United States is to maintain its economic dominance in the
Information Economy.
[[Page H2791]]
For all of these reasons, I encourage the House to pass
H.R. 3709 tomorrow.
Very truly yours,
James S. Gilmore, III,
Governor of Virginia.
Mr. CONYERS. Mr. Chairman, I yield 2 minutes to the gentleman from
Oklahoma (Mr. Istook), a real States' Righter.
Mr. ISTOOK. Mr. Chairman, I thank the gentleman for yielding me this
time.
I have had a personal computer on my desktop for over 15 years, using
it daily, watching it become an important part of work, of
entertainment, of information gathering, of finding out the news, of
doing research. I use it constantly. And I hear people say, well, do
not tax the Internet. Okay, that is fine. I do not want to tax the
Internet. But I do not hear those same people saying do not tax
telecommunications, do not tax department stores, do not tax clothing
stores. Where is the principle of fairness and consistency?
If we tell businesses that by hooking up with the Internet they gain
exemption from taxes, competitive pressure means all businesses will
work through the Internet to exempt themselves from taxes. But we are
not talking about Federal taxes that we are deciding. We are taking
away the ability of our States and our communities to have the tax base
that pays for schools, that pays for roads, that pays for police, that
pays for fire protection.
Do not tell me to not tax the Internet unless we want to also say we
will not tax telecommunications. Get rid of all of them. My cable modem
at home comes through our cable TV provider. There is a tax on it. Do
we say we will grandfather that one in, but if California or somebody
else wants to do the same thing, they cannot do it? There is no
principle of fairness, no principle of equality.
We have traditional businesses. They have been in our communities.
They have sponsored little league teams, they have picked up trash by
the side of the road. They have helped with the PTA and school plays.
But we say we do not care about them because there is a new kid in town
that looks mighty attractive to us and we only care about them.
Now, I realize this bill purposefully evades the big issue, which is
equal treatment of collecting sales taxes. And people say, oh, well, we
will worry about that later. Yeah, after 5 more years, on top of
another year and a half to go. Justice delayed is just denied.
Decisions delayed are decisions denied.
Mr. Chairman, we need the principle of fairness, and we should not
take the easy decision. We are going to eat our dessert, but we are
never going to deal with eating our vegetables. Let us put the
decisions all in one, as we did in telecommunications reform, as we did
in financial services reform. We should not put off the tough
decisions.
Mr. GEKAS. Mr. Chairman, I yield 1 minute to the gentleman from
Oregon (Mr. Walden).
Mr. WALDEN of Oregon. Mr. Chairman, I just want to say that I have
gotten more mail on this issue than any other, other than satellite
television, in the last 16 months, and this is a classic letter:
``Dear Mr. Walden, I am a registered Oregon voter who uses this
service of long-distance e-mail often, and I do not think it is right
for the U.S. Postal Service, telephone companies, or any other entity
to tamper with a person's right to free Internet e-mail. I am posting
my no vote with you, my State representative. Thank you, sincerely,
Mrs. Marilyn D. Icenbice of Klamath Falls, Oregon.''
She is right. We are going to stop that and prevent that from
occurring.
And let me talk a minute about temporary taxes. There is a temporary
tax on our phone right now that was put in place to fund the Spanish-
American War. Like my colleague from Oklahoma just talked about some of
these taxes, we are going to get rid of that one, later this month,
hopefully.
So a temporary tax never goes away. And if we allow the Internet to
get caught up in that, we are in real trouble. Because the Internet and
high-tech has been the economy that is fueling what is going on in
terms of growth in America. Not in all sectors, but certainly an
important sector. And we can do the best to expand the Internet into
rural areas, like my district, by keeping it tax free.
I urge my colleagues to support this moratorium.
Mr. CONYERS. Mr. Chairman, I yield 2 minutes to the gentlewoman from
Texas (Ms. Jackson-Lee), a member of the subcommittee.
(Ms. JACKSON-LEE of Texas asked and was given permission to revise
and extend her remarks.)
Ms. JACKSON-LEE of Texas. Mr. Chairman, I thank the gentleman for
yielding me this time, and I thank those who have come to the floor to
debate this issue because it requires debate.
In fact, I would have wanted us to have deliberative hearings in the
Committee on the Judiciary, as the Committee on Commerce has proceeded
in hearings, to really answer the questions and concerns that are
expressed about the Internet by the proponents of this legislation and
to address the crucial issues as evidenced by those who oppose.
I listened to a previous speaker who indicated that there are 37
million individuals who access the Internet every day. Well, there are
17 million citizens, approximately, in the State of Texas who are not
able to speak for themselves when this legislation will cause them to
lose $50 million a year in Internet access taxes, or almost 51 percent
of their revenue with the loss of $1.7 billion.
Mr. Chairman, I do not understand why we would move so precipitously
to pass this legislation when there is still 18 months left on the
present moratorium and to eliminate States, such as Montana and Ohio
and Texas, those people who depend upon that revenue for education and
health care services, that we would eliminate their opportunity to
continue their structure of taxation.
In fact, Texas has stopped, or at least Texas has exempted the first
$25 per month in access fees from taxation. They have structured their
own taxation structure. But yet we come, without any hearings, to
eliminate the opportunity for those States to continue to assess those
fees and to receive revenue.
I would argue that we are way beyond where we should be. We realize
that the Internet can be expected to generate $350 billion a year
within the next 2 years for electronic sales. That is the reason why we
must do a measured and decided study on what we do.
I support the Delahunt amendment. I have an amendment to include the
grandfathered States. This is a bad bill the way it is. We are moving
too quickly and we are hurting a lot of people.
Mr. GEKAS. Mr. Chairman, I yield 1 minute to the gentleman from Texas
(Mr. Armey), the majority leader.
Mr. ARMEY. Mr. Chairman, this is indeed a defining moment. We are
really separating ourselves into two different camps here.
On one hand, we see those who see a digital divide. On the other
hand, we see those who see a world of digital opportunities. On one
hand, we see people who think the world is all about a zero-sum game of
stagnation and redistribution. On the other hand, we see people who
understand the world is about growth, development, innovation, jobs,
new products and new discoveries in our life.
Mr. Chairman, the fact of the matter is every State, every
municipality in America knows that high-tech America is a world of
digital opportunity, where there is economic growth, there is a new
firm every day, there is a new idea every day, there is a new product
every day, and every one of these communities, all flush with cash, are
offering digital America whatever tax concessions they can to come
locate in their State, come locate in their city.
They promise a tax break because they know what economic growth,
increased jobs will do to improve their schools, to improve their
community. Clean economic growth. High-tech members of the community.
Good citizens all. Every one of our States wants them. But, as soon as
the States then turn their attention to milking that cash cow that they
worked so hard to bring, then they say, well, we really have a zero-sum
game here. Now we need to have discriminatory taxation against this
very same institution called high-tech America.
This Congress says we are for growth. We are for development. We are
for the increased job opportunities and the better community that every
one of these communities seeks when they go
[[Page H2792]]
to a high-tech firm and they say come locate here. And my colleagues
all know we do it.
Now, one final point. Mr. Chairman, I am from Texas, and Texas was
grandfathered in for sales taxes. And I am in support of this bill,
even with the removal of the grandfathering States. Why? Because Texas
is better served by growth, economic development, expansion, invention,
creativity, innovation, discovery and the wonder that comes with high-
tech America than they are served with the paltry little bit of sales
tax increase they can get by applying discriminatory taxation to the
driving engine of the American economy.
{time} 1200
Mr. CONYERS. Mr. Chairman, I am pleased to yield 2\1/2\ minutes to
the gentleman from Texas (Mr. Doggett.)
Mr. DOGGETT. Mr. Chairman, I thank the gentleman for yielding me the
time.
Mr. Chairman, the economic dream of America is still alive and well
in Central Texas. A business can begin in a dormitory room, as Dell
Computer did, or in a garage, as hundreds of start-ups in our community
have done, and can grow into a multi-million dollar publicly traded
corporation.
This is an old principle of America that has now been applied in what
we call the ``new economy''. And if these start-ups, some of which are
very small, struggling companies before they become big prosperous
companies, are overburdened with having to file tax returns as thick as
a telephone directory in some 30,000 jurisdictions across the country,
we will stifle the growth of this new economy.
That is why I was an early supporter of the Internet Tax Freedom Act
and why I will vote for this Internet Nondiscrimination Act.
I also believe that there is great merit in permanently banning all
forms of taxation that could be imposed on use of the Internet itself,
on getting on the Web. We have seen that the Europeans have slowed the
growth of electronic commerce in their countries because it costs too
much and they get taxed too much even to get access to the World Wide
Web. Let's ``free the web'' of taxes throughout America.
I believe that a tax-free zone on the Internet will encourage the
growth and stimulation of this new economy and all the innovation, the
associated creativity that holds so much promise for the future of
America.
But I also know that our new economy has boomed in Central Texas,
largely because of entrepreneurial skill, an educated workforce, and a
quality of life with some secure neighborhoods, and environmental
awareness. If we do not have the local tax base to provide a police
department, if we have to rely on a virtual fire department, if we
cannot get the resources to upgrade our workforce and our public
education system, then our new economy will suffer just as much as if
we are overburdened with taxation.
Texas has some of the highest access charges in the country. I do not
know why some of our State Republican leaders, who have offered so much
pro-technology rhetoric, have not worked to repeal those taxes, but
they have not. And, so, we are doing that in this bill.
The Internet Tax Freedom Commission failed in its responsibility to
balance these conflicting concerns.
In short, what I would say today is that a good concept is being
applied in this bill in a bad way, it is being rushed through not to
help the Internet but to help in the next election. The desire is to
mislabel Democrats as being pro-tax and anti-tech. That is wrong.
We should be coming together to resolve this issue, not having the
kind of electoral grandstanding that is occurring here.
Further, there is a danger that an extended moratorium will open the
door to the 59.5 percent Federal sales tax that the gentleman from
Georgia (Mr. Linder), who was just out here, and too many Republicans
have been advocating.
Republicans are advocating replacing the Income Tax Code with a 60
percent tax on every Internet transaction. That would be a real
setback.
Mr. GEKAS. Mr. Chairman, I yield 3 minutes to the gentleman from
Pennsylvania (Mr. Peterson).
Mr. PETERSON of Pennsylvania. Mr. Chairman, I thank the gentleman
from Pennsylvania (Mr. Gekas) for giving me this opportunity and for
his leadership on this issue.
Mr. Chairman, we have just heard a lot of rhetoric. And that is what
it is. It is rhetoric. It is not fact.
E-commerce is a vital building block in America's future. We are
being told that the changes in the next decade will quickly overshadow
the changes of the 1990s. Think about that. We are going to overshadow
this progress that we have made in the last decade in a couple years.
And it has been hard for me to fathom the changes that we have seen in
just the last few years.
What should we do? My father was an 8th-grade-educated steelworker
but wise beyond his formal education. When I got in government, he said
to me, Son, when you get in government, first do no harm. Do not get in
the way. Do not stop progress. Do not let government overregulate,
control, or tax success that is the major force in growing our quickly
changing economy in this society.
If we want something to slow up, tax it. If we want something to stop
growing, tax it some more. If we want something to go away, tax it
again and regulate it.
What should we do? Well, I was a bricks-and-mortar retailer for 26
years. We heard their defense today. If I were a retailer today, I
would be using e-commerce to expand my business, not for defense.
By using the Internet, every American entrepreneur has the chance to
go to a global marketplace without building further infrastructure. We
must try to get everyone to understand the potential of the Internet,
that is where we need to put our time, and teach them how it use it,
promote access, and make sure they all have the fast pipeline, that
they can use the Internet in the most efficient way.
Let me tell my colleagues what we have not heard enough talk about is
adjusting our educational system to the high-tech society of today. We
are not preparing the workforce of today for the technology jobs of
today. Hundreds of thousands, if not millions, of jobs are going
begging in this country, good paying jobs, because we are not up to
speed with the technology changes.
So let us keep government out of the way, what we are doing with this
legislation; let us not promote and allow further taxation to stop this
growth; let us have incentives to educate the public so they understand
how to use it and benefit from it, incentives to expand the pipeline so
everybody has the high-speed pipeline; and last, but not least,
drastically look at our educational system and expand technology
education in this country by big numbers, because the academic system
we have is not training people for the high-tech jobs of today, and the
companies that are growing and paying the taxes that will fund our
governments need high-tech workers that we need to make sure are
available for their future.
Mr. CONYERS. Mr. Chairman, I am pleased to yield 1 minute to the
gentlewoman from Oregon (Ms. Hooley).
Ms. HOOLEY of Oregon. Mr. Chairman, in October of 1998, we
overwhelmingly passed the Internet Tax Freedom Act, a law to keep the
heavy-handed government taxes off the Internet. We passed this law
because we all know that if we overburden e-commerce by taxing it, it
will never achieve its full economic potential.
This 3-year moratorium has worked. Over the past years, the growth of
Internet use has been tremendous. The number of Internet users doubles
every 100 days according to the U.S. Department of Commerce and
accounts for 15 percent of our total economic growth.
Many of us are talking about closing the digital divide. What better
way to make the Internet more affordable for everyone than by extending
this tax moratorium.
With the rapid growth of the Internet and the economic benefits that
it brings, use of the Internet should not be restricted by multiple and
discriminatory taxes. That is why this legislation to extend the
Internet tax moratorium for 5 years is so important.
I urge my colleagues to support this important legislation.
Mr. GEKAS. Mr. Chairman, I yield 3 minutes to the gentleman from
Virginia (Mr. Davis).
[[Page H2793]]
(Mr. DAVIS of Virginia asked and was given permission to revise and
extend his remarks.)
Mr. DAVIS of Virginia. Mr. Chairman, the Internet is the most
empowering invention since the printing press. It allows individuals
now when they go to buy things to have the buying power that was once
reserved for retailers.
Mere students at the elementary school level can now have access to
information that was once reserved for educational elites and kings and
princesses. This will empower people to make better decisions and help
their own lives.
Yet, we still have a digital divide in this country where too many
people do not have access to the Internet, their kids do not have
access. The challenge to us is that this gap between the rich and poor,
which has been widening, will not widen further with the growth of
technology.
This moratorium is an effort to bridge this digital divide by saying
we are not going to put taxes on this and people who cannot afford this
today are not going to be priced out of the market by excessive
governmental taxation. That is all this does. And for 5 years it gives
us the opportunity for businesses to make their plans over that time.
It does not address the sales tax issue. That is a constitutional
issue. It was raised in Quill v. North Dakota. This Congress can
address that any time it wants to come back, or it can be addressed
through the courts. But it does say that we are not going to have over
7,000 different local taxes and fees relating to the Internet all over
this country, that we are not going to do the usual philosophy that if
it moves, we tax it, if it keeps moving we regulate it, and when it
stops moving we subsidize it.
We are going to allow the entrepreneurs and the businesses that have
built this Internet and that have programmed the software that has made
this available to the average citizen's fingertips, we are going to
allow them to keep on doing what they have been doing and grow the
economy.
There is no question we are due for a tax overhaul in this country.
The information revolution changes the whole paradigm in terms of how
people make wealth. At the local level, it is still measured in
property taxes. I spent 15 years in local government. The property tax
no longer gives us the financial ability in many jurisdictions to raise
the money for education and public safety and the like.
Wealth has moved into knowledge, and this is something for over the
long term as we address our IRS Tax Code. That is why I move that we
try to scrap the Tax Code and rethink how we tax people. But this is a
signal to all of the entrepreneurs and businesses out there in making
their plans that the Internet is off limits for State and local
governments over the next 5 years.
They are already getting increased receipts as a result of the
development of the Internet. Every new phone line that comes in, there
are access charges related to that. Phone bills that go in, those are
Internet fees. They are paying that to State and local government.
Sales of equipment. My colleagues do not think they have sales taxes on
the sales of equipment and the like? Electric bills. The new employees
that are created pay all different kinds of taxes.
Revenues are up at the State and local level, and a lot of this is
because of the Internet. If we put a tax on top of this, it not only
hurts us domestically but it hurts us across the globe.
America is 5 percent of the world's consumers. Ninety-five percent of
the world's population lives outside the United States. If we start
taxing it here, we start talking about destroying the goose that laid
the golden egg. That is the end of American dominance of the world
economy on the Internet.
Mr. Chairman, I rise today as an original sponsor and enthusiastic
supporter of H.R. 3709, the Internet Nondiscrimination Act. With
Internet use and global electronic commerce growing at an astronomical
pace, it is inarguable that the Internet is emerging as the most unique
and the fastest-growing tool of communication known to mankind. The
Internet facilitates not only economic growth but the easy
dissemination of ideas and information from almost any spot in the
world. We are at the tip of the iceberg in terms of the potential that
the Internet can offer both cheaply and quickly.
Yet an ever-present concern plagues many of us who understand the
need to foster the Internet's continued growth: the government
interference in the electronic marketplace--whether it be through
regulation or tax policy--will create barriers that interfere with the
transformation of the Internet into the repository of global
communications and commerce for the 21st century.
Two years ago, we recognized that state and local taxation in
electronic commerce would require a thorough analysis before we could
formulate a balanced and restrained federal policy on the taxation of
goods and services sold over the Internet. While most of us agree that
regulation of the Internet would hinder technological innovation and
economic growth, we also understand the legitimate needs of state and
local governments who use sales tax revenue to fund services for their
citizens. We enacted a 3-year moratorium on Internet access taxes and
multiple and discriminatory taxes on goods and services sold over the
Internet. We also created the Advisory Commission on Electronic
Commerce to begin that process and identify all of the integrated
issues that arise in the context of taxation and the Internet Economy.
As we all know, the Commission reported its findings and proposals
last month. While the Commissioners could not agree on a way to resolve
the thornier issues of sales and use taxes and Internet access charges,
among others, they did provide a critical basis for us to continue
discussing how we prevent Internet taxation from discouraging every
American's access to the Internet and inhibiting electronic commerce.
And among their recommendations was a proposal--supported by a
majority, 11 out of the 19 Commissioners--to extend the current
moratorium on those types of taxes for another 5 years.
I understand that some of my colleagues believe the moratorium should
not last as long as 5 years and others believe that we have to address
this important issue in a comprehensive manner. To the latter concern,
I wholeheartedly agree--this issue needs to be resolved in a methodical
and holistic manner. But we need to implement a realistic time frame
that will allow us to resolve each and every layer of the problems
presented by taxation in a digital world.
This problem cannot be about politics. It cannot be about one side
fighting at all costs for victory over another. 56 percent of U.S.
companies will sell their products online by 2000. The Internet Economy
now accounts for 2.3 million jobs. Global Internet commerce has
generated nearly $145 billion in revenue since 1998. The U.S. not only
has the fastest-growing number of Internet users, but the largest
proportion of e-commerce consumers.
How we address Internet taxation without hindering Internet access
and expansion is one of the most important long-term economic policy
decisions that our nation will make. That is why a 5-year moratorium is
critical. I want to congratulate my colleague, Congressman Cox for his
steadfast and outstanding leadership on this issue. I urge all of my
colleagues to support H.R. 3709 and oppose any amendments that weaken
the extension of the Internet tax moratorium.
Mr. Chairman, I urge adoption of this bill.
Mr. CONYERS. Mr. Chairman, how much time remains on each side,
please?
The CHAIRMAN pro tempore (Mr. Nethercutt). The gentleman from
Michigan (Mr. Conyers) has 7 minutes remaining. The gentleman from
Pennsylvania (Mr. Gekas) has 10\1/2\ minutes remaining.
Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I include for the Record the following editorial from
the Washington Post dated today, May 10, 2000:
A Demagogic Bill
The House is scheduled to vote today on a five-year
extension of the current ``moratorium'' on Internet taxation.
The extension is deceptive legislation that in the short run
doesn't do what most people think and that in the long run
could do real harm. The measure does not ban state sales
taxes on e-commerce--transactions over the Internet. But it
sounds as if it does, which suits the sponsors just fine.
They pose as champions not just of a tax haven but of a
technology in which America leads the world (and of an
industry that has become a major source of campaign
donations). Not to worry that the electronic commerce they
embrace poses a serious threat to the sales tax base of the
states whose interests they also profess to champion. That is
another day's problem.
Not all members were prepared to join in the grandstanding.
``When it's convenient, we all give lip service to the 10th
Amendment, pledging allegiance to local and state government
rather than federal control,'' Rep. Ernest Istook said in a
letter addressed mainly to his fellow Republicans. ``Yet this
week there is a rush to trample that 10th Amendment, hoping
to buy favor with a select few groups.'' ``Who will educate
the
[[Page H2794]]
Internet entrepreneurs of tomorrow, if the state and local
tax base is destroyed,'' he asked. ``The Internet should not
be singled out to be taxed, nor to be freed from tax.''
What the bill actually imposes is a moratorium not on
electronic sales taxes but on taxation of access to the
Internet, the monthly changes from AOL and similar providers.
States remain free to levy taxes on Internet sales. Their
problem is that they often can't collect them. The Supreme
Court has ruled that they can't require out-of-state sellers
to do the collecting for them in the same way they do in-
state merchants. The threat, as more and more commerce shifts
to the Internet, is not just that the states will lose
revenue but that traditional merchants will be placed at a
competitive disadvantage. The disadvantage could have the
effect of accelerating the shift to the Internet, in which
case the process will feed on itself.
The answer is for the states to make their tax codes more
uniform--not the rates, but the definitions: what constitutes
food, for example, which is often exempt. Then Congress
should authorize an interstate compact, under which sales
taxes on e-commerce could easily be collected and remitted by
computer. The National Governors Association is working
toward such a result, which the Supreme Court would likely
countenance. Instead of a show vote such as this, implying
that it opposes such an outcome, the House should cast a vote
in favor of it. The harm in this legislation is not what it
actually does but in the commitment it implies--that the
Internet will be tax free. Mr. Istook asked the relevant
question. If his colleagues persist in undercutting the sales
tax, are they ``ready to replace it with some form of federal
revenue sharing for states and communities?'' No is the
answer. No should be the answer to this demagogic bill as
well.
Mr. Chairman, I also include the following letters for the Record:
April 12, 2000.
Hon. Trent Lott,
Majority Leader, U.S. Senate, The Capitol, Washington, DC.
Hon. Thomas A. Daschle,
Minority Leader, U.S. Senate, The Capitol, Washington, DC.
Hon. J. Dennis Hastert,
Speaker, House of Representatives, The Capitol, Washington,
DC.
Hon. Richard A. Gephardt,
Minority Leader, House of Representatives, The Capitol,
Washington, DC.
Dear Senator Lott, Senator Daschle, Speaker Hastert, and
Representative Gephardt: We are writing to urge support for a
fair and equitable system to ensure that all Main Street
retail stores and Internet commerce can compete on a level
playing field and to ensure that all Americans can join us in
supporting the Internet as part of our new economy.
Unfortunately, the Advisory Commission on Electronic Commerce
(ACEC) proposal that was included in the Internet Tax-Freedom
Act (ITFA) commission report, but failed to attain the two-
thirds majority required by the Act, does the opposite.
Instead of addressing the requirements laid out in the law to
recommend a new state and local sales tax system to provide
for fairness and balance, the proposal chose to use this
opportunity to seek a host of new and expensive special tax
breaks. We urge you to reject the report.
As stated in the duties section of the legislation the
commission was to ``conduct a thorough study of federal,
state, local, and international taxation and tariff treatment
of transactions using the Internet and Internet access and
other comparable intrastate, interstate, or international
sales activities.'' The commission proposal did not focus on
Internet transactions, but instead made a recommendation that
would reduce other existing state and local tax revenues by
over $25 billion per year.
Not only would the proposal eliminate existing sales tax on
such items as books, movies, music, and magazines that are
sold in local ``bricks and mortar stores'' but also would
substantially reduce existing state corporate income and
property taxes. The proposal, with a revenue loss of that
magnitude, would disrupt the financing of state and local
services and likely devastate education funding, which
represents over 35 percent of the average state budget.
Furthermore, instead of creating a level playing field for
all sellers, it would put the federal government in the
position of both picking winners and losers and also making
the current digital divide more severe.
The most important reason for us to oppose this proposal is
that it would substantially interfere with state sovereignty.
The U.S. Constitution was very clear in both ensuring state
sovereignty and creating a critical balance between federal
and state authority. For well over 200 years the federal
government has respected state sovereignty and has been
extremely careful not to interfere with the states' ability
to independently raise revenues. This proposal would
dramatically undercut this precedent.
It is hard to think of any more fundamental responsibility
of governments and elected officials in our nation than that
of determining which taxes and fees are utilized to pay for
the services that our citizens want and need. State and local
governments rely on sales, property, and income taxes--no two
the same, reflecting the enormous diversity of our nation.
This proposal would intrude very deeply into the rights and
responsibilities of state and local governments.
Sincerely,
Michael O. Leavitt, Chairman, Utah; Parris N. Glendening,
Vice Chairman, Maryland; Thomas R. Carper, Delaware;
Christine Todd Whitman, New Jersey, Paul E. Patton,
Kentucky; James B. Hunt, Jr., North Carolina; Jim
Geringer, Wyoming; Bill Graves, Kansas; Don Sundquist,
Tennessee; Jane Dee Hull, Arizona; Mike Huckabee,
Arkansas; John Engler, Michigan; Tommy G. Thompson,
Wisconsin; Frank O'Bannon, Indiana; Kenny Guinn,
Nevada; Dirk Kempthorne, Idaho; John A. Kitzhaber,
M.D., Oregon; Carl T.C. Gutierrez, Guam; Cecil H.
Underwood, West Virginia; Mike Foster, Louisiana;
Benjamin J. Cayetano, Hawaii; Jesse Ventura, Minnesota;
George H. Ryan, Illinois; William J. Janklow, South
Dakota; Tom Vilsack, Iowa; Angus S. King, Jr., Maine;
Pedro Rossello, Puerto Rico; Gary Locke, Washington;
Lincoln Almond, Rhode Island; Bob Taft, Ohio; Ronnie
Musgrove, Mississippi; Mike Johanns, Nebraska; Marc
Racicot, Montana; Howard Dean, M.D., Vermont; Tom
Ridge, Pennsylvania; Tony Knowles, Alaska.
____
Commonwealth of Pennsylvania,
Office of the Governor,
Harrisburg, PA, April 12, 2000.
Hon. Trent Lott,
Majority Leader, U.S. Senate, The Capitol, Washington, DC.
Hon. J. Dennis Hastert,
Speaker of the House, House of Representatives, The Capitol,
Washington, DC.
Dear Senator Lott and Speaker Hastert: I understand that
Congress may soon consider proposals addressing the Internet
Tax Moratorium set to expire next year. Technology has been a
central focus of my administration since I took office 5
years ago. From education to public safety, our commitment to
information technology is helping Pennsylvania to remain
competitive in the global economy and preserve the high
quality of life in the Commonwealth. Internet based commerce
is changing the face of how we do business in Pennsylvania
and providing rapid access to a whole new world of
information.
To foster the electronic boom I support an extension of the
current Moratorium on access, multiple, or discriminatory
taxes. The Internet has been growing at a record pace and I
believe the moratorium has facilitated that process by
assuring that commerce over the Internet is not singled out
and taxed in new and creative ways. That is why I proposed
and the Legislature approved a repeal of Pennsylvania sales
taxes on computer services as well as a tax prohibition on
Internet access charges. More recently, in my 2001 budget, I
have proposed a Sales Tax Holiday for Commonwealth residents
who buy personal computers.
Pennsylvania is rather unique because we continue to
manufacture goods. Thus, technological advances are often
applied to many of those goods produced in Pennsylvania.
Decisions on the taxation on Internet commerce therefore, are
very complex and must balance the needs of both Internet and
Main Street based businesses.
The report submitted by the ACEC Business Caucus to the
Advisory Commission on Electronic Commerce acknowledged that
``In addressing whether and how the Internet should be
subject to taxation, a major priority should be reducing or
removing access barriers to perhaps the most advanced and
useful medium of communication and commerce yet devised''. I
concur.
I also agree with the Caucus position that the system
taxation of remote sales should be simplicity, efficiency and
fairness--and that ``(o)ur system of federalism mandates that
the burden to produce such a system falls on the states''.
My concerns with the report include their preemption of the
state role, albeit for allegedly a period of five years,
during which time the Caucus recommends that Congress pass
laws preempting state sovereignty. We, state and local
elected officials, are best suited to reach a consensus on
what changes need to be made to our sales and property taxes
without creating a competitive disadvantage for any of our
businesses. The magnitude of the undertaking is only equaled
by its importance. States must work with local governments
and its stakeholders--consumers, telecommunication and other
remote businesses as well as our Main Street business to
address these challenges.
As Congress considers legislation on Internet taxation, I
hope that a guiding principle will be fair competition
between Main Street businesses and Internet businesses. An
extension of the Moratorium will provide us more time to
assess the situation and ensure that we do no harm to either
side. I strongly urge that when considering the impact of
electronic commerce on our economy, any changes to the state
tax structure should be done gradually and with consultation
of all stakeholders.
Sincerely,
Tom Ridge,
Governor.
____
State of North Dakota,
Office of the Governor,
Bismarck, ND, April 7, 2000.
Hon. J. Dennis Hastert,
Speaker of the House, Rayburn House Office Building,
Washington, DC.
Dear Speaker Hastert: I am concerned about the current
dialogue on taxation of e-
[[Page H2795]]
commerce and the recent report of the Advisory Commission on
Electronic Commerce.
I do not know of a single Republican governor who wants to
raise taxes. At the same time, I agree with Governor Leavitt
and others who oppose any of the commission's findings that
would allow Congress to infringe on a state's sovereignty or
mandate tax exemptions for certain goods.
Yet, I am equally concerned about the need for a simplified
and equitable tax structure. It is complex, I know: We should
avoid doing anything to stifle the growth of the Internet and
the new economy, and yet I refuse to put my Main Street
businesses at a competitive disadvantage.
States and Congress will doubtlessly need to work together
to address these issues, which is why the Commission was
established. It is clear to me that these issues have not
been resolved, and Congress should not consider a piecemeal
approach at the expense of states' autonomy.
I look forward to working with you as we make our way
through this complicated and important issue.
Sincerely,
Edward T. Schafer,
Governor.
____
Office of the Governor,
Santa Fe, NM, April 12, 2000.
Hon. Trent Lott,
Majority Leader, U.S. Senate, The Capitol, Washington, DC.
Hon. Thomas A. Daschle,
Minority Leader, U.S. Senate, The Capitol, Washington, DC.
Hon. J. Dennis Hastert,
Speaker, House of Representatives, The Capitol, Washington,
DC.
Hon. Richard A. Gephardt,
Minority Leader, House of Representatives, The Capitol,
Washington, DC.
Dear Senator Lott, Senator Daschle, Speaker Hastert and
Representative Gephardt: I are writing to urge support for a
fair and equitable system to ensure that all Main Street
retail stores and Internet commerce can compete on a level
playing field and to ensure that all Americans can join us in
supporting the Internet as part of our new economy, and to
urge you to reject the Advisory Commission on Electronic
Commerce (ACEC) report. Instead of proposing a means
addressing the requirements laid out in the law to recommend
a new state and local sales tax system to ensure a level
playing field and to protect the sovereignty of states, the
report proposes unprecedented interference into the rights
and responsibilities of the citizens of New Mexico and their
ability to determine how they want to finance vital public
services and infrastructure.
The new economy offers incredible opportunities. It imposes
a great responsibility on all of us to enhance electronic
commerce, but not at the expense of our small, Main Street
businesses. In a world like this, if remote sales over the
Internet are taxed differently than intra state sales, we
will have a system based upon a tangle of legal maneuvering
that will create separations between local merchant and their
Internet counterparts, and a playing field that will be
viewed as inherently unfair. Such unfairness, if left to
fester, will bring contempt and non-compliance. It is hard to
argue with the need for an enormous simplification of state
and local sales taxes that can pave the way toward a level
playing field that does not discriminate between methods of
access. Congress needs to ensure we in New Mexico can move
toward a level playing field. It needs to make sure the
federal government does not act in a way that permanently
discriminates against our small businesses and retailers.
The most important reason I oppose this proposal is that it
would substantially interfere with state sovereignty. The
U.S. Constitution was very clear in both ensuring state
sovereignty and creating a critical balance between federal
and state authority. For well over 200 years the federal
government has respected state sovereignty and has been
extremely careful not to interfere with the states' ability
to independently raise revenues. This proposal would
dramatically undercut this precedent.
It is hard to think of any more fundamental responsibility
of governments and elected officials in our nation than that
of determining which taxes and fees are utilized to pay for
the services that our citizens want and need. It is my
responsibility, working with our state legislature, to
determine what taxes to cut in New Mexico--not anyone else's.
Our state relies primarily on sales, property, and income
taxes--all areas proposed for mandated federal cuts by the
report. Such a proposal would intrude very deeply into the
rights and responsibilities of our state and local
governments.
Sincerely,
Gary E. Johnson,
Governor.
____
State of Alabama,
Office of the Government,
Montgomery, AL, April 11, 2000.
Hon. Trent Lott,
Majority Leader, U.S. Senate, The Capitol, Washington, DC.
Hon. J. Dennis Hastert,
Speaker of the House, House of Representatives, The Capitol,
Washington, DC.
Dear Senator Lott and Speaker Hastert, I am writing to
express my grave concerns regarding the Advisory Commission
on Electronic Commerce (ACEC) proposal that was included in
the Internet Tax Freedom Act (ITFA). I believe the proposal
represents an attempt by the federal government to take
control of fiscal policy away from the states, and I strongly
urge you to reject the report.
As Governor, I have pursued responsible, conservative
fiscal policies. In some instances, targeted tax cuts are an
important part of this State's over financial plan. However,
these are decisions that must rest with the State, and not
with Congress. As you may know, any such measure would
potentially infringe on this State's ability to support
public schools. Therefore, I am unequivocally opposed to any
attempt by the Federal government to interfere with the
states' rights to collect sales taxes.
In addition, while I appreciate the policy challenges posed
by the new global economy, I have concerns with Congress
establishing a series of tax breaks for a few special
interests. This is particularly true when doing so would
undermine a more-than 200-year tradition old of respecting
states' sovereignty. Again, I ask you not to advance any
effort to take control from the states and send it to
Washington.
Sincerely,
Don Siegelman,
Governor.
____
State Capitol Building,
Oklahoma City, OK, April 10, 2000.
Hon. Dennis Hastert,
Speaker of the House, House of Representatives, Washington,
DC.
Dear Speaker Hastert: As you prepare to consider
legislation concerning taxation of sales made on the
Internet, I ask that you consider these important factors:
First, I believe it is important to extend the existing
moratorium on taxation of Internet transactions to allow more
debate and discussion of this vital issue. We are dealing
with new technologies and new forms of commerce which are
still being developed and refined. The taxation moratorium
has helped stimulate that early growth, and premature action
by the federal government could represent a stifling
influence.
Second, Congress should not pre-empt the states on this
issue. Each state has its own unique tax structure. It would
be a mistake to impose a ``one size fits all'' standard on 50
separate states and the District of Columbia. We currently do
not have a national sales tax; sales taxes have traditionally
been the province of state and local governments, and each
has chosen its own path in this regard. To suddenly impose a
new national standard would contradict our party's
traditional adherence to the principle of federalism.
Third, no matter what form legislation ultimately takes, it
must have as a central goal the creation and preservation of
a level playing field. It would simply be unfair to establish
a system where one state or one region or one industry has a
special advantage.
Fourth, as you will recall from our visits during my
chairmanship of the Republican Governors' Association last
year, GOP governors (and some Democrats) have been most
active in reducing state tax burdens and in reforming and
restructuring state tax systems. In Oklahoma, for example, we
have won the first reduction in personal income tax rates in
50 years and capped property taxes. State-level tax reform is
a work in progress; we are planning further income tax
reductions and cuts in the cost of vehicle license tags, and
I know other governors are doing the same. In many cases,
state and local sales taxes remain a central component of the
respective budgets of those jurisdictions. It is essential
that the states retain the freedom to set tax rates and
policies concerning those revenue sources that fund state and
local government.
I appreciate the leadership you have shown on this issue
and ask that your future actions and deliberations be fully
informed by the needs of the states and the requirement of
fairness to all.
Sincerely,
Frank Keating,
Governor.
Mr. Chairman, we have here a very important consideration: Are we
doing too little too soon? And I think the answer is that we are.
It is important to focus, as we have not done in the Committee on the
Judiciary, on how this bill affects the States that have Internet
access taxes, such as Texas.
I find it interesting in Texas that, under Governor George W. Bush,
there exists the largest Internet access tax in the country, estimated
to raise $200 million per year. This tax is supported by Governor Bush,
who has not raised a finger yet to repeal it. And yet, today the
majority would substitute their judgment in place of their own nominee
by repealing the Texas tax on the Internet access.
So I am very deeply concerned that we have brought a bill to the
floor that violates the unfunded mandate rule that was put in place by
the very majority that brings this bill to the floor.
We do not know what the cost is going to be. We have a pledge that we
will hold hearings to find out the answer to this very perplexing
question sometime in the future. But today we have a bill before us
that is premature, a bill that does not consider fully the questions
that it needs to consider, and
[[Page H2796]]
a bill that is, therefore, ahead of its time.
Now, if we extend this moratorium through the year 2000, there is a
risk that we may never get to the more important issues of State tax
simplification. This undermines the principal purpose of the 1998
Internet tax legislation, which gave an advisory commission on
electronic commerce the ability to consider how best to develop a more
simple and rational system than exists at the present.
{time} 1215
The commission threw up its hands, unable to reach consensus on this
or any other related important issue. Although we do not support
multiple discriminatory State taxes on the Internet, we are concerned
that extending the present moratorium for 6, and if you count it
completely, 7 years, would only serve to indefinitely delay the work on
the real problem, an overly complex system of more than 6,500 local and
State tax jurisdictions, and the potential of current law under the
Quill decision to subject similarly-situated sellers to different tax
collection regimes.
Mr. Chairman, I reserve the balance of my time.
Mr. GEKAS. Mr. Chairman, I yield 5 minutes to the gentleman from
California (Mr. Cox).
Mr. COX. Mr. Chairman, I thank the gentleman from Pennsylvania (Mr.
Gekas) not just for yielding me this time, but also for the splendid
work that he has done in bringing the legislation in timely fashion to
the floor. As the author with Senator Wyden of the original Internet
Tax Freedom Act and also of this Internet Nondiscrimination Act, I am
very pleased at the bipartisanship in this effort.
Senator Wyden of course, our former colleague here in the House of
Representatives, is a Democrat from Oregon. I am a Republican from
California. President Clinton signed this legislation. We have been,
Republicans and Democrats, working on this for a very long time with
very good results. What we now find, having enacted a moratorium a few
years ago, a time-out, as it were, on new taxes on the Internet,
discriminatory taxes on the Internet or multiple taxation on Internet
commerce, that we have nothing to fear from good policy.
Originally when Senator Wyden and I introduced our bill, it was a
permanent ban on taxes that would discriminate against the Internet,
treat the Internet less favorably than Main Street, treat the Internet
less favorably than brick-and-mortar enterprises. But in order to make
sure that we were not shortchanging State and local governments, we
worked with them and fashioned a moratorium for a short while so that
we could see with empirical, real-world results whether this good
policy, what we knew in the abstract was good policy, worked in the
real world. Now the results are in.
In my home State of California, for the most recent month, sales
taxes are up some 20 percent. As a matter of fact, brick-and-mortar
sales at the shopping malls of America were up 8 percent. That is a
much bigger base, by the way. There is a lot more retail through brick
and mortar than there is over the Internet. In fact, there is a lot
more catalog sales over the telephone than there are Internet sales
these days.
But brick-and-mortar sales are way up in this new economy. Sales
taxes are up in this new economy at all levels of government, not just
in California, but across the Nation. The Federal Government, which
does not impose any sales taxes on these transactions, is benefitting
hugely from the growth in this new economy through an increase in
income taxes and other kinds of revenue flows that are the natural
result. When more people are working, people are more productive. That
is what is going on in America right now.
So by adopting a policy of not killing the goose that is laying the
golden eggs, adopting a policy of moderation in taxation, we have had
some great successes. Remember why we did this in the first place. Not
because we wanted in any way to crimp the ability of a State or a local
government or even the Federal Government to collect taxes, but rather
because there was a risk that the number of taxing jurisdictions in
America, the sheer number of them, some 30,000, could, if they all laid
claim to their modest piece of the Internet, drown the whole thing in a
sea of red tape, paper compliance and, not least of all, revenue
exactions.
And so we said no, this is not something that we want to see fall
victim to the tyranny of the parochial. The new economy is something
that we cherish, something that gives America a competitive advantage
in the world, that is creating jobs as we have never seen them created
before. So let us ensure that from a policy standpoint, we look at the
Internet as what it is, not just State commerce, not just local
commerce, but interstate commerce subject to the jurisdiction of the
Congress under Article I, section 8 of our Constitution and, indeed,
global commerce.
What we are doing now today is falling short of perfection, which
would be to make permanent the ban on multiple taxes on the Internet or
make permanent the ban on discriminatory taxes on the Internet, but we
are doing the next best thing. Because this is a legislature and we
have to compromise, we are extending this moratorium for 5 years. That
is at least a minimum amount of time to give people some certainty of
how to plan. People can wake up tomorrow morning and know that there is
not a government effort to shake down the Net.
It is important, I think, for us to recognize specifically how brick-
and-mortar people are benefiting from this new Internet economy. First
of all, many of them are starting out with their own e-commerce windows
on the world, so a little company locked away in some rural area that
could only serve a tiny community in a tiny market of customers a few
years back now through the Internet has the world's cheapest ever means
of reaching customers throughout their State, throughout the country
and around the world, and we are seeing a great deal of that. As a
result, as I said, taxes collected by government which depends on
growth of this economy are up.
Mr. Chairman, I want to emphasize for my colleagues what has been
pointed out in this debate before. The sales tax debate is a very
important one, but it is not this bill. This bill keeps discriminatory
and multiple taxes off the Internet. There is no justification for
doing otherwise. Please vote yes on the legislation.
Mr. CONYERS. Mr. Chairman, I am pleased to yield the balance of my
time to the gentleman from Massachusetts (Mr. Delahunt).
Mr. DELAHUNT. Mr. Chairman, let me be very clear. I, too, support the
moratorium. In fact, I was one of the early cosponsors of the Cox-Wyden
legislation, because it seemed to me essential that Congress provide
sufficient breathing room to develop a more uniform, fair, efficient
neutral system of taxation of transactions, whether it be on the
Internet or whether it be out of a brick-and-mortar enterprise. And
over the past 2 years, the States have made considerable headway in
this effort. I see no reason why it should take them 5 more years to
complete it. In fact, a 5-year extension will eliminate a major
incentive for them to get the job done.
That is why the 5-year extension is opposed by the National Governors
Association, the National Conference of State Legislatures, the Council
on State Governments, the U.S. Conference of Mayors, the National
League of Cities, the National Association of Counties, the E-fairness
Coalition, and scores of other business organizations.
The gentleman from California referred to the bipartisan nature of
the original moratorium bill. What I would suggest, too, is that there
is a bipartisan concern about what we are about to do here today with a
5-year extension. It is clear that a 5-year extension is opposed by 36
governors, Republicans and Democrats alike, including Governor Leavitt
of Utah, Governor Sundquist of Tennessee, Governor Thompson of
Wisconsin, Governor Ryan of Illinois, Governor Engler of Michigan,
Governor Ridge of Pennsylvania and Governor Taft of Ohio, all staunch
Republicans, not a tax-and-spend liberal among them.
But they are opposed to the underlying bill, because they realize
that a 5-year extension will accelerate the erosion of the sales tax
and diminish the ability of the States to fund vital services, States
that depend on the sales tax for as much of a third of their total
[[Page H2797]]
revenue. They also understand that small businesses will suffer the
longer the underlying issues are not addressed.
Mr. GEKAS. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from
California (Mr. Gary Miller).
(Mr. GARY MILLER of California asked and was given permission to
revise and extend his remarks.)
Mr. GARY MILLER of California. Mr. Chairman, I rise in support of
H.R. 3709, which will extend the moratorium on taxing the Internet.
However, I must point out the irony of passing this measure while
continuing the Federal excise tax on telephone service.
H.R. 3709 tells the States that they cannot tax access to the
Internet, a measure which I thoroughly support. But in order to access
the Internet, one must have a phone line. For the past 101 years since
the Spanish American War, the Federal Government has levied an excise
tax on this item. As we debate limiting States' ability to tax the
Internet, we should also limit the Federal Government's ability. I feel
that this Congress must take responsibility for the tax it has imposed
on the phone services which impact the Internet. My colleague just
talked about the problem called the digital divide, the disparity
between those who can afford high technology innovation such as home
Internet service and those who cannot.
By eliminating this unjust Federal excise tax on the telephone,
Congress takes a step forward in decreasing this gap. Mr. Chairman, the
Spanish American War is truly over. Should we not repeal the tax
instituted to pay for it and make Internet access cheaper for everyone?
I urge my colleagues to support the Internet Nondiscrimination Act and
to take the next step by repealing the phone tax.
Mr. GEKAS. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from
New York (Mr. Lazio).
Mr. LAZIO. Mr. Chairman, I want to thank the gentleman from
Pennsylvania for yielding me this time.
Mr. Chairman, I rise in support of H.R. 3709. Mr. Chairman, this is
an age of unparalleled discovery, an age in which the boundaries of
human knowledge are expanding at breakneck speed. Mr. Chairman, the
high tech revolution that both propels and dominates this global
economy is advancing so quickly that no one, no one, really knows where
this wave of innovation is taking us. No one really knows how
tomorrow's technology will improve our quality of life.
Mr. Chairman, no one imposed a ship tax on Ferdinand Magellan when he
left Spain to sail around the world. No one put a mule tax on Lewis and
Clark when they left St. Louis to explore the American west. Why on
earth would we want to impose a tax on an evolving communications
medium that is reshaping our world and transforming our daily lives?
Why would we want to impose a tax burden that might stifle the next
wave of high tech innovation? Why would we want to inhibit the very
revolution that has allowed students to learn from professors half a
world away? Why would we want to smother a technology that has enabled
doctors to save countless lives by engaging in consultations in other
continents?
Mr. Chairman, we do not know what life-enhancing fruits this high
tech revolution will reap for humanity. We do not know where the high-
tech roller coaster will be taking us next. All we can do is hang on
and enjoy this fabulous ride. All we can do is to not place unnecessary
obstacles in its path. Mr. Chairman, no taxation without knowing the
destination. Let us not smother the World Wide Web. Let us extend the
moratorium on Internet taxation.
Mr. GEKAS. Mr. Chairman, I yield myself such time as I may consume.
I want to capsulize some of the arguments that have been made to the
effect that this piece of legislation does not affect the rights of the
States to impose or to deal with sales taxes. That is a truth that must
be said, stated over and over again, or else we will be led astray in
the points that are going to be made during the amendment process and
in the final vote on this legislation. This creates a 5-year moratorium
as recommended by the very commission which our first act in the last
Congress promoted, and which was the core of that piece of legislation.
So, no adverse impact on sales taxes, and the 5 years are what has
been carved out by the people who delved into it through the work of
the commission. These truths are self-evident, and I hope will
constitute the basis for a final vote in favor of this legislation.
Mr. BACA. Mr. Chairman, I regret that a White House meeting on
providing a prescription drug benefit for America's seniors prevented
me from voting on the point of order to H.R. 3709, the Internet
Nondiscrimination Act (rollcall number 154).
If I had not been meeting with the President, I would have voted
against the point of order.
While I share the concern of the gentleman from Michigan about the
impact of mandates on state and local governments, this is too
important a bill to cut off debate.
The American people have demanded that we roll up our shirt sleeves
and solve this issue. I have heard from hundreds of my constituents,
who are concerned about the possibility that we will tax this new
technology to the point where it is no longer viable.
I see science and the Internet as the key to the future of America
and the Inland Empire. We must allow Internet companies to flourish. In
fact, I invite Internet-based industries to come to the Inland Empire,
where we will create 15,000 new jobs through the LAMBRA enterprise zone
legislation I authored. We have entered a new era of prosperity and
unlimited possibilities for our children. We have a great future if we
encourage Internet-based companies through bills such as H.R. 3709.
Mr. MOORE. Mr. Chairman, I rise today in opposition to H.R. 3709, the
Internet Nondiscrimination Act, which would impose a new five year
moratorium on the ability of our state and local governments to collect
sales taxes on commercial Internet transactions. Instead, I will be
supporting the Istook amendment, which will limit this new moratorium
to two years.
The growth of e-commerce has presented policy makers with a host of
complex new issues over the last few years. One of the largest
challenges, however, is not a new issue, but an age-old problem--
taxation.
Some argue that online retail transactions should remain exempt from
tax collections due to problems with defining points-of-sale in the
cyber marketplace. Additionally, opponents of taxing Internet sales
argue that requiring taxation will stifle growth, creativity, and
innovation in this new industry. On the other hand, state and local
officials view the Internet as a tide that will erode local and
regional tax bases with devastating consequences to traditional brick-
and-mortar retailers as well as critical state and local government
functions.
To come to grips with this problem and these competing points-of-
view, in 1998, Congress passed the Internet Tax Freedom Act that
prohibited any new state, local, or federal taxes on electronic
commerce until October 2001. In addition, it created a 19-member
Advisory Commission on Electronic Commerce to study the Internet
taxation issue and report its recommendations to Congress.
The Advisory Commission issued no recommendations, because of a lack
of consensus on this issue. But, despite this fact, Congress is set
today to vote on a bill that would extend the current moratorium for an
additional five years, even though the current moratorium does not
expire until October 1, 2001--a full 17 months from now. Congress
should take this 17 month opportunity to hold public hearings on this
issue, rather than rushing to the floor a contentious and politically
motivated bill that pits traditional business against e-business.
While almost everyone agrees that there should be no new taxes or
fees on Internet services or access, there is little consensus on
allowing state and local governments to collect sales taxes on remote
electronic commerce transactions.
The distinction between these two forms of taxation is subtle, but
critical. Taxing Internet services and access would surely stifle the
growth and innovation of this emerging industry. Taxing remote sales
transactions, however, will not restrict this growth; rather it will
ensure that all business entities--whether located on Main Street or
Cyber Street--will be able to equitably and fairly compete.
Moreover, allowing state and local governments to collect sales taxes
on remote transactions will ensure that critical state and local
services such as education and public safety will continue to be
adequately funded and controlled at the state and local level where
they belong.
Mr. Chairman, this is why 34 of our nation's governors, Republican
and Democrat, including Governor Bill Graves of Kansas, oppose
extending this moratorium. As well, almost every municipal and county
government in my district has passed resolutions opposing legislation
like H.R. 3709 that erode their taxing authority. I have included one
such resolution for the Record.
I am supporting the Istook amendment that provides a two year
extension of the moratorium because I believe that Congress, our
[[Page H2798]]
states and our municipalities need time to develop a fair, simple and
equitable system that is guided by the following principles:
Fairness: Any solution should apply not only to Internet
transactions, but to all remote transactions so as not to unfairly
discriminate against e-commerce transactions. But we must also
recognize that not taxing remote transactions, including e-commerce,
unfairly discriminates against traditional face-to-face transactions.
Simplicity: The solution should not be difficult for the digital
economy to apply or for local and state governments to administer.
Limited Scope: Sales should be taxed in order to provide a level of
fairness to traditional brick-and-mortar businesses, but the use of the
Internet itself should not. In other words, Congress should not tax
data transmission, network services, or anything else that would amount
to a tax on the medium itself.
Mr. Chairman, the advent of e-commerce should not be viewed as either
a threat or potential windfall for state and local governments.
Assessing taxes on Internet sales should, all else being equal, have no
effect on state and local tax revenue. What is lost as a result of
decreasing face-to-face sales should be offset by gains from increasing
online sales.
Indeed, as a matter of fairness and fiscal responsibility, remote
sales should not be beyond the scope of state and local tax
jurisdictions. Further, those state and local jurisdictions should not
have to cede their independent authority to a federally mandated flat
sales tax system. The ultimate solution should use the same tools that
enable e-commerce to construct an easy-to-use mechanism for businesses,
consumers, and governments alike to operate in the digital economy--a
software based solution that is able to identify and levy the
appropriate level of sales tax based on the location of the buyer. This
is a solution that is fair, simple, and limited in scope.
February 28, 2000.
Hon. Dennis Moore,
U.S. Representative, 3rd Congressional District, Washington,
DC.
Re: Issue of Sales Tax on Internet Commerce: ``Making
Commerce Fair,'' Resolution No. 2000-17.
Dear Congressman Moore: We are writing to voice our concern
about the issue of sales tax on Internet commerce. Please
find enclosed the City of Lenexa's Resolution regarding this
issue. This matter is of vital concern to Kansas cities. The
existing moratorium greatly impacts the State of Kansas, our
cities, and our counties, causing a loss in sales tax
revenues.
The inequity in price experienced by our Lenexa brick and
mortar established merchants caused by requiring them to
collect taxes on the sales of goods while not requiring the
collection of taxes on the sale of goods sold via internet,
mail order or phone is of grave concern to our city. This
practice creates a competitive disadvantage and unequal
treatment between our local merchants and those who sell from
electronic stores. We must protect our merchants from this
unfair and unacceptable practice.
We must preserve the right of state and local governments
to establish and collect legally due sales and use taxes on
goods and services sold, and act to protect state and local
taxing authority over all remote sales. We encourage your
understanding of the importance of this issue to the City of
Lenexa, Johnson County, and the State of Kansas.
Sincerely,
Joan Bowman,
Mayor, City of Lenexa.
Resolution No. 2000-17
making commerce fair
Whereas, the use of new electronic technologies, including
the Internet, as a way to conduct sales of goods and services
is accelerating; and
Whereas, out-of-state sales of goods conducted via the
Internet, mail order and phone, under many circumstances, are
not subject to existing sales and use taxes imposed by the
states and local governments in which the purchaser of such
goods resides; and
Whereas, the inequity in price experienced by not requiring
the collection of taxes on the sale of such goods, creates a
competitive disadvantage and unequal treatment between
merchants who sell from brick and mortar establishments and
those who sell from electronic stores; and
Whereas, this migration of sales and the resulting erosion
of tax revenues will restrict the ability of local
governments, schools, and states to collect taxes which
finance essential public services including but not limited
to police, fire, emergency medical service, and education;
and
Whereas, out-of-state sales have an adverse impact on local
infrastructure and on the continued survival of retail
businesses in our cities; and
Whereas, municipal governments have long expressed concern
about the loss of municipal revenue due to out-of-state sales
(originally via mail order); and
Whereas, these out-of-state sales are freely made as a
voluntary business decision to expand or establish business
electronically or from remote locations; and
Whereas, 99% of the goods and services purchased over the
Internet are bought using electronic money transfers, as
exemplified by the use of credit cards, which pre-establishes
the ability to identify and collect taxes in non-
discriminatory and efficient ways; and
Whereas, the primary barrier to creating a non-
discriminatory collection requirement is the Supreme Court's
judgment that only Congress should determine a collection
requirement that would not unduly burden interstate commerce;
and
Whereas, the National League of Cities, in partnership with
the six national organizations representing state and local
governments, has adopted a joint statement of principles for
making electronic commerce fair which calls for:
1. Equal treatment of all sales transactions whether that
transaction is done in person, on the telephone, by mail, or
on the Internet;
2. A federal law authorizing state and local governments to
require out-of-state sales to be subject to the collection
and remittance of sales and use taxes;
3. Protection from federal preemption of state and local
authority to determine their own tax policies;
4. Cooperative efforts to simplify state and local sales
and use tax systems and the compliance burdens those systems
place on out-of-state sales; and
Whereas, the federal government has created the Advisory
Commission on Electronic Commerce to examine these issues;
Now therefore be it
Resolved by the governing body of the city of Lenexa,
Kansas:
Section One: The City of Lenexa, Kansas, a municipal
corporation, does hereby urge the Advisory Commission on
Electronic Commerce to recommend that Congress enact and the
President sign legislation authorizing state and local
governments to establish and collect legally due sales and
use taxes on goods and services sold, through any transaction
medium, regardless of the actual purchaser's state, and
requires states to distribute tax revenues to cities or other
units of local government pursuant to precedent and
applicable state law.
Section Two: The City of Lenexa, Kansas encourages the
Kansas Congressional Delegation to act to protect state and
local taxing authority over all remote sales including goods
sold via the Internet, mail order, and phone.
Section Three: This resolution shall become effective upon
passage by the Governing Body.
Passed by the Governing Body this fifteenth day of
February, 2000.
Mr. POMEROY. Mr. Chairman, I am voting for this bill because I
believe the American public deserves unfettered and untaxed access to
the Internet--perhaps the most significant technological innovation
impacting our way of life in decades. I firmly believe that Internet
access must remain open to everyone. We cannot place roadblocks in the
path of those eager to join this new and exciting world.
The Internet is not simply a source of entertainment or a virtual
shopping mall. Today, people use this valuable tool to access a variety
of information, ranging from which car to buy to reading weather and
news reports to researching job opportunities or accessing college
applications. The possibilities are limitless. The Internet has
provided states such as North Dakota an unprecedented opportunity to
overcome the traditional geographic disadvantages. We cannot stifle the
growth of this fast moving virtual world.
Unfortunately, the Commission formed to address the important issue
of Internet taxation failed to develop a comprehensive plan to address
this matter. The bill before us does not interfere with the ability of
states to collect taxes on purchases made over the Internet. Instead it
is aimed at ensuring that Internet Service providers, such as AOL, do
not pass additional tax burdens onto Internet users. However, we must
address the taxation of items purchased on the Internet. We cannot
allow our main street shops to operate at a competitive disadvantage to
Internet sales. As the Internet continues to flourish, Congress must
look at these issues and take careful, appropriate action to level the
playing field.
Again Mr. Chairman, I believe that all Americans should have open
access to the Internet, and for that reason, I rise in support of this
legislation.
Ms. DeGETTE. Mr. Chairman, today I voted for H.R. 3709, the Internet
Nondiscrimination Act because I believe that it is important to move
this legislation forward so that Congress stays focused on the vital
issue of taxation of the Internet. I supported an amendment that would
have extended the moratorium for an additional two years. I believe
this would have provided the needed amount of time for use to find a
balance between protecting the Internet from any new discriminatory
taxes and preserving the ability of states and localities to collect
sales and use taxes.
Unfortunately, the two-year extension amendment failed and I
therefore voted for final passage as a means of moving this legislation
forward with the expectation that a compromise will be worked out
between the
[[Page H2799]]
House and the Senate to adequately address this issue.
It is important to protect the integrity of the Internet from
multiple and potential discriminatory taxes. It is equally important
that this be done without inhibiting the ability of states to collect
the taxes they have always collected. The Internet Nondiscrimination
Act does nothing to inhibit the collection of these taxes, but it also
does nothing to resolve the issue of how states can continue to collect
state use and use taxes as more and more people shop via the Internet.
I believe we can foster the booming technology and telecommunications
industries across the country without harming our states. Congress
needs to work closely with state government and the technology industry
to develop a good policy that promotes growth in the technology
industry without hurting local businesses across this country. We need
to pursue a policy that creates a level playing field and ensures fair
taxation across the board. I believe this can be done and I will work
towards this end until we can come to a satisfactory resolution of this
issue.
I believe the passage of this legislation is an important step in an
ongoing process that will eventually produce a bill that reflects the
concerns of all interested parties.
Mr. LIPINSKI. Mr. Chairman, I rise today to express my dismay that
H.R. 3709 has been brought to the floor without ample time to discuss
the important issue of the Internet taxation moratorium and its
effects. There were no hearings held, nor time allotted for retailers,
states, cities and counties to speak out on the issue. Clearly, we
could have utilized the eighteen months before the October 21st, 2001
moratorium expiration for meaningful discussions on the issue.
The spirit behind the Internet Tax Freedom Act was to allow the
Internet to flourish, while examining an approach to Internet sales.
Adding five years to the current moratorium is not a step towards
finding a permanent solution. We must work towards a solution that
everyone can work with now, not three years from now, nor five years
from now. If we wait, many of our country's ``brick and mortar''
businesses may likely be wiped out by the E-commerce that can sell for
less and avoid collecting taxes. This is not fair competition.
We cannot ignore the effects that H.R. 3709 would have on our states'
and localities' tax base. According to a University of Tennessee study,
the revenue lost by 2003 is projected to be $20 billion per year. This
is the revenue that we rely on for state and local services, as well as
for education. How can the Internet and high-tech industry continue to
flourish without educating our children, the future of America?
We need to find a long-term resolution to this important issue, not
avoid dealing with it for nearly six years. For this reason, I will be
voting against H.R. 3709 and its amendments.
Mr. STARK. Mr. Chairman, today we have before us a bill that extends
the current ``Internet Tax Freedom Act'' moratorium on certain
Internet-related state sales and use taxes. While I do respect the need
to foster growth and innovation on the Internet and for technology in
general, I do not believe that this bill does so in a responsible way.
The current moratorium expires in October 2001. This gives Congress
over 17 months to come up with a plan to address Internet taxation. We
do not need until 2006 to come up with a viable solution to Internet
taxation. This gives Congress too much time to sit on its hands and
place blame when a solution should be reached much sooner.
Currently, Internet merchants are not required to collect state sales
and use taxes unless they have a presence in the state. This does not
statutorily relieve the purchaser from remitting the state sales and
use taxes due from Internet purchases. However, in reality this is not
the case when there is no enforcement mechanism.
Clearly, Internet commerce has an advantage over traditional commerce
if consumers are able to circumvent paying taxes on Internet purchases.
Not only does this set up an unfair system for traditional commerce for
having to collect the state and local taxes, thus ultimately costing
the consumer more, but it also prevents state and local communities
from capturing the taxes they would otherwise receive. Today's bill
will hamper a state's ability to effectively tax Internet purchases,
thus eroding a state's source of funding for education, health and
other vital services.
Congress should not implement a tax advantage for one method of
commerce over another for five years. Instead, we should figure out how
to level the playing field while encouraging innovation today. For
these reasons, I oppose H.R. 3709 and urge my colleagues to do the
same.
Mr. BENTSEN. Mr. Chairman, I am in opposition to H.R. 3709, the
``Internet Nondiscrimination Act,'' which extends the existing
moratorium on state and local taxation of Internet access and commerce
by five years and repeals the grandfather clause for existing state
laws related to Internet taxation. Let me be clear, I am not advocating
federal taxation of the Internet. I support a reasonable extension of
the moratorium. But, I also support upholding state's rights under the
10th Amendment and ensuring equity for businesses, small as well as
large.
H.R. 3709 would establish a five-year moratorium on all state and
local taxes on Internet access and commerce. While this bill assumes
that states would still be free to tax transactions under the U.S.
Supreme Court's 1992 decision in Quill Corp. v. Heitkamp, 504 U.S. 298
(1992), the Quill decision only provides for the collection of sales
taxes by states when companies meet the ``nexus'' test for transactions
within the geographic borders of the consumer's state. Though not
explicitly acknowledged, proponents of H.R. 3709 appear to be seeking
an eventual ban of Internet sales taxes. Now, of course, all of us
would like to see less taxes, including with respect to Internet sales.
At the same time, however, as internet sales rise as a share of the
national economy, state and local governments will find their tax based
substantially eroded and their ability to fund such essential functions
as schools and public safety jeopardized. Furthermore, businesses which
conduct sales from physical locations in a state or local jurisdiction
will find themselves at a competitive disadvantage. That creates a
commercial inequity, a really ignored by H.R. 3709.
This bill should not be construed as simply an extension of the
initial year moratorium and the Advisory Commission on Electronic
Commerce that was adopted in 1998 with my support. Rather, H.R. 3709,
by extending the moratorium by five years with no resolution by the
Commission, simply postpones confronting and resolving the issue at
hard. How can Congress and state and local governments best address
both commercial equity between Internet sellers and ``bricks and
mortar'' retailers as well as state and local government financial
structures. This bill is an abdication on the part of Congress at the
expense of others. The better approach would be to adopt the amendment
offered by Mr. Delahunt to extend the moratorium by only two years and
proceeding toward resolution of the broad issues. I strongly support
this approach and I cannot support H.R. 3709, a blanket five-year
moratorium.
The fiscally prudent course would be to analyze the effect the
moratorium has on states' ability to collect revenue and the degree to
which traditional merchants are placed at a competitive disadvantage,
as more commerce shifts to the Internet. H.R. 3709 does not address the
complicated issues of how and when states might be able to collect
sales taxes on Internet commerce. An outright ban on taxation of
Internet sales could very well forces state such as taxes, which rely
heavily on sales and property taxes, to impose a personal income tax in
order to make up new shortfalls, as Internet sales increase. I oppose
an income tax for Texas and I particularly oppose the Congress imposing
such a tax on Texans, a foreseeable unintended consequence of this
bill.
I am dismayed that my Republican colleagues have rushed H.R. 3709
through the legislative process without proper public hearings to
determine the impact such legislation would have on ``brick and
mortar'' retailers and the future revenues of state and local
governments. With the current moratorium in effect until October 2001,
the timing of this vote is suspect. Clearly this is a transparent
attempt by Republicans to score political points with the high-tech
industry at the expense of state and local governments, taxpayers, our
public schools and small businesses on Main Street, America.
H.R. 3709 also impose financial restrictions on the State of Texas by
eliminating the grandfather clause in the Internet Tax Freedom Act
(ITFA) bestowed on those states which have already promulgated taxes on
Internet access. Passage of H.R. 3709 would result in a shortfall to
the State of Texas well in excess of $50 million. Here again, the
Delahunt amendment is the better course of action in that it preserves
the grandfather clause. Therefore, Mr. Chairman, without the Delahunt
amendment, I must oppose H.R. 3709.
Mr. GOSS. Mr. Chairman, I strongly support this modified open rule,
which will ensure Members an opportunity to openly and fairly debate
H.R. 3907. This bill extends the current moratorium on Internet taxes
for five years--as recommended by the Independent Advisory Commission
on Electronic Commerce. The creation of the Internet has revolutionized
communication around the globe and has had a tremendous impact on our
daily lives. One of the reasons the Internet has flourished is that the
majority in Congress has worked hard to restrain eager regulators,
bureaucrats and tax collectors from unnecessary interference in the
Internet. There are areas for appropriate government action--child
pornography and the like--but, by and large, the appropriate course of
action is to let the Internet continue to grow
[[Page H2800]]
without undue government regulation or intrusion.
I am pleased that this bill continues to strike a commonsense
balance. Given the lack of consensus on how to deal with imposing sales
taxes on commercial transactions over the Internet, H.R. 3709 wisely
continues the moratorium on this activity. In addition, the bill
continues and strengthens the prohibition on Internet access taxes.
Opposition to Internet access charges has been one of the top issues in
my mail bag for some time now. Congress must continue to stand firm on
this issue, protecting consumers and ensuring the continued growth of
the Internet. I want to extend my appreciation to the Judiciary
Committee and the leadership for moving expeditiously on this bill. I
encourage my colleagues to support both this fair and open rule and
H.R. 3709.
Ms. DUNN. Mr. Chairman, the proliferation of the Internet has been
the most liberating force in American life in recent history. It has
spawned a whole new vocabulary, created a forum for social interaction
and education, and brought unprecedented productivity to the workplace.
Most importantly, it levels the American playing field. It makes it
possible for the poor and underprivileged to gain access to educational
materials once found only in the new schools of affluent suburbs. It
also makes it possible for today's woman to make her mark in the
business world while balancing the rigorous demands of work and family.
The Internet is the essence of freedom and must maintain this feeling
of uninhibited access.
With the development of such a powerful social and business tool,
however, come many challenges and temptations. The most pressing
challenge before us now is how to conform a decades-old tax system
based on geographic boundaries to a new world for which there is an
unlimited capacity for exploration. The biggest temptation will be to
find a quick solution to the potential loss of local government revenue
due to E-commerce. These are serious issues with which we must deal
with great deliberation. We cannot afford either to create barriers to
Internet access through new taxation or to pretend that the increasing
rate of E-commerce will not negatively impact money to support local
schools, police, and parks. For this reason, I supported the Internet
Non-Discrimination Act to extend the current Internet tax moratorium
for another five years, and I call on all parties to begin a vigorous
debate that will bridge the divide between the need to keep the
Internet free of new barriers and the legitimate concern of local
governments that rely on sales for basic services.
This is a complex provision, and there has been some public
misperception about the current moratorium and what an extension means.
The moratorium has three main components: one that deals with Internet
access and two that deal with E-commerce. First, it prohibits the
implementation of a tax on Internet access. As I have previously
stated, access to the Internet has revolutionized the lives of millions
of Americans. We cannot allow barriers to be erected that will make it
harder for families living on the edge of poverty to have access to
this powerful tool. Second, it prohibits the collection of
``discriminatory'' taxes on the Internet. If there is a product that is
sold at the corner grocery store without a sales tax, it should not be
taxed if purchased over the Internet. Third, it prohibits ``multiple''
taxes. If an individual purchases a good from another state, that good
should not be taxed by both states. All of these measures have allowed
people to enjoy the unfettered freedom of the Internet while helping to
create millions of new jobs.
It is equally important to understand what the moratorium does not
do. Neither the original Internet moratorium nor the extension passed
today in the House affects the ability of states to levy sales taxes on
Internet purchases. As stated above, the moratorium bars only multiple
and discriminatory taxes, and taxes on Internet access. The current
rules governing the ability of states and local governments to collect
sales tax or taxes on remote sales were set by the U.S. Supreme Court
in 1992. The moratorium and its extension leaves these rules untouched.
Nevertheless, the explosion of Internet traffic since this ruling has
already made many of its guidelines problematic for state and local
governments.
This new world without borders must be redefined in order to provide
local governments the ability to protect funding for key government
services. Local governments must also participate in a discussion about
streamlining the tax systems in the over 6,000 different tax
jurisdictions throughout the country. They cannot simply expect that
companies--whereever they are or whatever their size--will dedicate the
untold amount of resources necessary to duplicate all of these tax
systems, figure out how much tax to charge a given item, and then remit
that tax to the particular government. Through streamlining these tax
systems and providing some degree of uniformity, companies will be much
more willing to partner with state and local governments.
The Internet is changing the fundamental structure of our society and
we are well served to change with it. Resisting its benefits or trying
to mold it to reflect our byzantine government systems will only limit
its full potential. As we work to ensure that the Internet will be
unencumbered by new barriers, let us join together to create an
environment in which E-commerce and local communities can flourish
together.
Mr. UDALL of Colorado. Mr. Chairman, I am in support of H.R. 3709,
the Internet Nondiscrimination Act.
The bill we're voting on today addresses two main questions. One has
to do with taxing Internet services. A consensus seems to be forming--
among a majority of the members of the Advisory Commission on
Electronic Commerce and many others--that there should be no new
tariffs or taxes on Internet services. I agree. H.R. 3709 would
prohibit such taxes for 5 years, an important step to reduce the price
of and thus eliminate barriers to Internet access.
The other question--whether or not State government should be allowed
to collect sales taxes on e-commerce transactions made between
residents and companies residing in other states--is more problematic.
We hear it argued both ways. Supporters of a permanent moratorium
say, for instance, that the imposition of any new taxes would likely
result in the lowering of tax revenues from other sources because of
the deadening effect such taxes would have on overall economic growth.
Opponents of an indefinite extension point out that the more we deprive
states and localities of revenues from sales taxes--which are often the
primary source of revenue to fund education--the more we risk
neglecting the very students who we hope will fill jobs in the high-
tech economy in the future.
I do share some of the concerns voiced by many Governors and State
legislatures. I am concerned that an extended moratorium might
indirectly weaken state and local funding that provides our communities
with essential public services such as education, law enforcement and
transportation. So I am concerned that an extension of 5 years may be
too long because the definition of ``Internet access'' may change so
much in the next half decades that the provisions in this bill may no
longer fit an evolving economic context.
It is clear that traditional businesses are disadvantaged by sales
over the Internet. But it is also clear that many young, small e-
commerce businesses could suffer if they are forced to negotiate the
maze of more than 7,000 State and local taxes.
An industry still in its infancy must be handled with care. But at
some point, the gloves must come off. What we're doing today is
deciding to put off this decision for another 5 years. I believe that
we're not prepared to agree on how and when the gloves should come off,
and that's why I support this bill, although I think it would be better
if the extension were shorter. But I do believe we must use the years
ahead productively to seek ways to streamline and simplify sales tax
systems, a task that many states--including Colorado--are already
undertaking.
Mr. Chairman, we are living in a new era. A unique constellation of
circumstances--a burgeoning technology sector, low unemployment, and
low interest rates--has given way to the longest peacetime period of
economic expansion this country has ever known. We need to ensure that
we don't do anything hastily that will derail this revolution. At the
same time, we mustn't ignore the people and businesses that for years
have sustained our communities.
Mr. COOK. Mr. Chairman, I am in support of H.R. 3709, the Internet
Nondiscrimination Act. A few short years ago, no one other than
academics had ever heard of the Internet. Today, it has become an
integral part of everyday life. The information that is now available
through the click of a mouse is mind-boggling. With this new
information has come a new form of economic growth, e-commerce. You can
buy almost anything on the Internet, from cars, to groceries, airline
tickets to antiques. The explosion of new business starts, online
banking, and e-trade has been fueling the economic prosperity we have
been enjoying the last few years.
The Internet has removed barriers to entry for thousands of small
businesses, particularly women and minorities. It has created millions
of high paying e-jobs and has allowed consumers to find the highest
quality product at the lowest cost. In 1999, the Internet was the
second largest industry in the U.S., producing $507 billion in revenue
and created 2.3 million new jobs. Imposing discriminatory taxes on the
Internet, would stifle this industry and destroy the very engine that
is driving our economy.
I understand the concerns of state and local governments. They are
only looking at the money they are supposedly losing in revenue. But,
they are not looking at the revenue they have gained through a strong
economy. States are in their best financial position in decades because
of the strong economy and
[[Page H2801]]
the decrease in demand for social services. In a time of record budget
surpluses and strong economic growth, state governments do not need
more power to tax online transactions and Internet access. Local
governments do need funds to provide services like fire, police and
ambulance coverage. But they need to be given a greater share of the
state's sales tax revenues and not have to rely on new Internet
taxation.
In a booming economy there is no reason to impose deterrents for new
e-business that will ultimately hit consumers. There is no need to
charge consumers for accessing the Internet. Today's bill would place a
5-year moratorium on taxing this new industry. I think the moratorium
should be permanent. I urge my colleagues to support this legislation
and keep the Internet free of discriminatory taxation.
Ms. BALDWIN. Mr. Chairman, I am in opposition to H.R. 3709, the
Internet Nondiscrimination Act. This legislation extends the moratorium
on State and local internet access taxes as well as on so-called
``multiple and discriminatory taxes'' imposed on internet transactions,
subject to a grandfather on taxes of this nature imposed prior to 1998.
I believe the current moratorium is good public policy. Internet
commerce is an infant industry with huge potential growth and benefits.
With numerous taxing jurisdictions, the practicalities of taxation of
internet sales require extensive study and careful consideration. We
need to ensure that internet commerce is not unduly burdened by the
complexities of local taxing jurisdictions. Thus, the current
moratorium, which does not expire until October 21, 2001, provides an
appropriate period in which to examine this issue carefully.
I am concerned, however, about a 5-year extension of the moratorium
until 2006. The current disparate tax treatment between traditional
``bricks and mortar'' retailers and remote sellers has the potential to
significantly harm existing retailers. Internet business ultimately
should be competing with traditional businesses on an equal footing. An
extended moratorium provides an advantage to internet commerce by, in
effect, exempting those companies from sales and other state and local
taxes. This advantage should not continue indefinitely.
I am also concerned about the impact on state and local government
revenues. Sales taxes are a significant source of revenue for many
state and local governments. As internet sales expand at the expense of
traditional retail sales, there could be significant revenue reductions
to States. Congress should not simply create this problem for the
States and then leave them to solve it. States collect more than 49
percent of their revenue from sales taxes, according to the Census
Bureau. I fear this legislation could have a damaging impact on
critical service such as police and safety, health, and education.
Congress needs to work with the states to address this important issue.
Let me be clear. I do not support discriminatory taxes on internet
access. E-commerce should be treated in the same manner as traditional
sales and services.
Continuation of the internet tax moratorium beyond October 2001 is
appropriate. I supported the Delahunt/Thune Amendment which would have
extended the moratorium for an additional two years until October 2003.
I believe that a two year extension is far wiser public policy than a
five year extension or a permanent ban. I wish the House had seen fit
to amend the bill with a two year limit. By 2003, the States could
build on the very serious steps they have already taken to reform and
simplify their tax laws. Congress could then consider whether we should
approve any interstate compact that addresses the simplification issue.
If the States were not making any progress by 2003, it would be a
simple matter to extend the moratorium for an additional period of
time.
Mr. Chairman, I do not believe a five year moratorium is sound public
policy. I urge my colleagues to defeat this legislation. The next
Congress will have ample time to extend the current moratorium for 2
additional years.
Mr. CALVERT. Mr. Chairman, I strongly support H.R. 3709, the Internet
Non-Discrimination Act. Why? Quite simply, an unhindered Internet has
brought the benefits of knowledge, trade and communications to more
people in more ways than ever before.
H.R. 3709 is not about sales taxes on Internet purchases. The bill in
no way stops or restricts states or cities from taxing sales over the
Internet. In fact, current rules governing state or local governments'
ability to collect regular sales or use taxes on remote sales were set
by the U.S. Supreme Court. H.R. 3709 leaves these rules untouched.
Instead H.R. 3709 stops new taxes that specifically target Internet
access and sales. The bill extends for five years the current Internet
tax moratorium, enacted in 1998. The existing moratorium outlaws taxes
on Internet access, the double-taxation of a product or service bought
over the Internet and discriminatory taxes that treat Internet
purchases differently from other types of sales. The bill also ensures
that the moratorium on Internet access taxes is equally enforced in all
50 states, for those who rushed to tax Internet access thinking that
they could avoid the federal law.
Mr. Chairman, I encourage my colleagues on both sides of the aisle to
support the Internet Non-Discrimination Act. The Internet should not
become subject to special, multiple or discriminatory taxes.
Mr. WOLF. Mr. Chairman, I support H.R. 3709, a bill which extends the
current moratorium on taxes on Internet access and taxes which apply
only to e-commerce.
It is no secret that the success of high technology and the rapid
growth of electronic commerce are key elements of our nation's
unprecedented recent prosperity. Additionally, the Internet has enabled
people around the country to have access to information and services
which were difficult--if not impossible--for them to obtain prior to
the high tech revolution.
I'm proud to represent Northern Virginia and the high-technology
community that dots the landscape along the Dulles corridor and I-66.
And I'm proud that we can boast that the place we call home is also the
home of the Internet. Our high-tech corridor just isn't an important
part of our regional prosperity. It's a critical part of the nation's
prosperity. The high tech industry's growth and job creation have been
key to our region's and America's booming economy. We must keep the
economy growing, keep the good paying jobs, and maintain our economic
prosperity. I believe H.R. 3709 is a key element in meeting these
goals.
Mr. Chairman, I yield back the balance of my time.
{time} 1230
The CHAIRMAN pro tempore (Mr. Nethercutt). All time for general
debate has expired.
Pursuant to the rule, the bill shall be considered for amendment
under the 5-minute rule for 2 hours. The committee amendment in the
nature of a substitute printed in the bill is considered as an original
bill for the purpose of amendment and is considered read.
The text of the committee amendment in the nature of a substitute is
as follows:
H.R. 3709
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Internet Nondiscrimination
Act of 2000''.
SEC. 2. 5-YEAR EXTENSION OF MORATORIUM ON STATE AND LOCAL
TAXES ON THE INTERNET.
(a) Extension of Moratorium.--Section 1101 of title XI of
division C of Public Law 105-277 (112 Stat. 2681-719; 47
U.S.C. 151 note) is amended--
(1) in subsection (a)--
(A) by striking ``3 years after the date of the enactment
of this Act'' and inserting ``October 21, 2006'', and
(B) in paragraph (1) by striking ``, unless'' and all that
follows through ``1998'',
(2) by striking subsection (d), and
(3) by redesignating subsections (e) and (f) as subsections
(d) and (e), respectively.
(b) Technical Amendment.--Section 1104(10) of title XI of
division C of Public Law 105-277 (112 Stat. 2681-719; 47
U.S.C. 151 note) is amended by striking ``unless'' and all
that follows through ``1998''.
SEC. 3. APPLICATION OF AMENDMENTS.
The amendments made by this Act shall not apply with
respect to conduct occurring before the date of the enactment
of this Act.
The CHAIRMAN pro tempore. During consideration of the bill for
amendment, the Chair may accord priority and recognition to a Member
offering an amendment that he has printed in the designated place in
the Congressional Record. Those amendments will be considered read.
The Chairman of the Committee of the Whole may postpone a request for
a recorded vote on any amendment and may reduce to a minimum of 5
minutes the time for voting on any postponed question that immediately
follows another vote, provided that the time for voting on the first
question shall be a minimum of 15 minutes.
Are there any amendments to the bill?
Amendment in the Nature of a Substitute Offered by Mr. Bachus
Mr. BACHUS. Mr. Chairman, I offer an amendment in the nature of a
substitute.
The Clerk read as follows:
Amendment in the nature of a substitute offered by Mr.
Bachus:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Interstate Sales and Use Tax
Compact Act of 2000''.
SEC. 2. FINDINGS.
The Congress finds that--
[[Page H2802]]
(1) the moratorium of the Internet Tax Freedom Act on new
taxes on Internet access and on multiple and discriminatory
taxes on electronic commerce should be extended;
(2) States should be encouraged to simplify their sales and
use tax systems;
(3) as a matter of economic policy and basic fairness,
similar sales transactions should be treated equitably,
without regard to the manner in which the sales are
transacted, whether in person, through the mails, over the
telephone, on the Internet, or by other means;
(4) Congress may facilitate such equitable taxation
consistent with the Supreme Court's decision in Quill Corp.
v. North Dakota, 502 U.S. 808 (1992), which based its
decision not to extend States' collection powers in
significant part on its view that Congress has, by virtue of
its constitutional power to regulate interstate commerce, the
ability to authorize States to require out-of-State sellers
to collect taxes on sales to in-State residents;
(5) States that adequately simplify their tax systems
should be authorized to correct the present inequities in
taxation by requiring sellers to collect taxes on sales of
goods or services delivered in-State, without regard to the
location of the seller or to the means by which the good or
service is sold;
(6) the States have experience, expertise, and a vital
interest in the collection of sales and use taxes, and thus
should take the lead in developing and implementing sales and
use tax collection systems that are fair, efficient, and
nondiscriminatory in their application;
(7) States, by their own initiative, have formed the
Streamlined Sales Tax System Project, a cooperative effort
with local governments to radically simplify the sales and
use tax system by bringing uniformity to tax bases,
definitions, and administration, by simplifying the tax rate
structure and administration, and by incorporating stringent
privacy controls and technology into the collection process
to preserve the basic tenets of consumer privacy, and that
such project should be allowed to proceed without
intervention by Congress; and
(8) online consumer privacy is of paramount importance to
the growth of electronic commerce and must be protected.
SEC. 3. EXTENSION OF INTERNET TAX FREEDOM ACT MORATORIUM
THROUGH 2006.
Section 1101(a) of the Internet Tax Freedom Act (112 Stat.
2681-719; 47 U.S.C. 151 note) is amended by striking ``3
years after the date of the enactment of this Act--'' and
inserting ``on December 31, 2006:''
SEC. 4. STREAMLINED SALES AND USE TAX SYSTEM.
(a) Development of Streamlined System.--It is the sense of
the Congress that States and localities should work together
to develop a streamlined sales and use tax system that
addresses the following:
(1) A centralized, one-stop, multi-state registration
system for sellers.
(2) Uniform definitions for goods or services that may be
included in the tax base.
(3) Uniform and simple rules for attributing transactions
to particular taxing jurisdictions.
(4) Uniform rules for the designation and identification of
purchasers exempt from sales and use taxes, including a
database of all exempt entities and a rule ensuring that
reliance on such database shall immunize sellers from
liability.
(5) Uniform procedures for the certification of software
that sellers rely on to determine State and local use tax
rates and taxability.
(6) Uniform bad debt rules.
(7) Uniform tax returns and remittance forms.
(8) Consistent electronic filing and remittance methods.
(9) State administration of all State and local sales
taxes.
(10) Uniform audit procedures.
(11) Reasonable compensation for tax collection that
reflects the complexity of an individual State's tax
structure, including the structure of its local taxes.
(12) Exemption from use tax collection requirements for
remote sellers falling below a specified de minimis
threshold.
(13) Appropriate protections for consumer privacy.
(14) such other features that the member States deem
warranted to promote simplicity, uniformity, neutrality,
efficiency, and fairness.
(b) No Undue Burden.--Congress finds that if States adopt
the streamlined system described in subsection (a), such a
system does not place an undue burden on interstate commerce
or burden the growth of electronic commerce and related
technologies in any material way.
SEC. 5. INTERSTATE SALES AND USE TAX COMPACT.
(a) Authorization and Consent.--States are authorized to
enter into an Interstate Sales and Use Tax Compact, and
Congress hereby consents to such a compact. The Compact shall
provide that member States agree to adopt a uniform,
streamlined sales and use tax system consistent with section
4(a).
(b) Expiration.--The authorization and consent in
subsection (a) shall automatically expire if the Compact has
not been formed before January 1, 2004.
(c) Compliance.--The streamlined sales and use tax system
prescribed by the Compact as provided in subsection (a) shall
be evaluated against the requirements of section 4(a) in a
report submitted to Congress in a timely fashion by the
Secretary of the Treasury who shall certify whether such a
system has met the requirements in section 4(a).
SEC. 6. AUTHORIZATION TO SIMPLIFY STATE USE TAX RATES THROUGH
AVERAGING.
Notwithstanding any other provision of law, any State
levying a sales tax is authorized to administer a single
uniform statewide use tax rate relating to all remote sales
on which it assesses a use tax, provided that for each
calendar year in which such statewide rate is applicable, if
such rate had been assessed during the second calendar year
prior to such year on all such sales on which a sales tax was
assessed by such State or its local jurisdictions, the total
taxes assessed on such sales would not have exceeded the
total taxes actually assessed on such sales during such year.
SEC. 7. AUTHORIZATION TO REQUIRE COLLECTION OF USE TAXES.
(a) Grant of Authority.--Any member State that has adopted
and participates in the streamlined system prescribed by the
Compact is authorized, notwithstanding any other provision of
law, to require all sellers not qualifying for the de minimis
exception specified in such system to collect and remit use
taxes on remote sales in such State.
(b) Conditions.--The authority in subsection (a) shall be
of no effect unless both of the following conditions are met:
(1) The streamlined system prescribed by the Compact has
been submitted to Congress prior to January 31, 2004, with
the approval of at least 26 member States.
(2) 90 days have passed from the date such system was first
submitted to Congress under paragraph (1), and no joint
resolution disapproving the system has been enacted pursuant
to the procedures in subsection (c).
(c) Procedure for Joint Resolution of Disapproval.--If the
Congress determines that the system prescribed by the Compact
does not meet the requirements of section 4(a), a joint
resolution disapproving such system may be enacted within 90
days of the submission of such system to Congress under
subsection (b), pursuant to expedited procedures similar to
and consistent with the procedures prescribed in section 2908
of the Defense Base Closure and Realignment Act of 1990 (10
U.S.C. 2687 note).
SEC. 8. LIMITATIONS.
(a) No Effect on Nexus.--No obligation imposed by virtue of
authority granted in section 7(a) shall be considered in
determining whether a seller has a nexus with any State for
any tax purpose.
(b) No Effect on Licensing, Regulation, Etc..--Nothing in
this Act shall be construed to permit a State to license or
regulate any person, to require any person to qualify to
transact intrastate business, or to subject any person to
State taxes not related to the sales of tangible personal
property.
SEC. 9. DEFINITIONS.
For purposes of this Act--
(1) the term ``State'' means 1 of the 50 States of the
United States of America and the District of Columbia;
(2) the term ``the Compact'' means the Interstate Sales and
Use Tax Compact authorized by section 5;
(3) the term ``goods or services'' includes any tangible or
intangible personal property and services;
(4) the term ``member State'' means a State that has joined
the Compact;
(5) the term ``remote sale'' means a sale in interstate
commerce of goods or services attributed, under the rules of
section 4(a)(3) of this Act, to a particular taxing
jurisdiction which jurisdiction could not, except for the
authority granted by this Act, require the seller of such
goods or services to collect and remit sales or use taxes on
such sale;
(6) a remote sale ``in'' a particular taxing jurisdiction
means a remote sale of goods or services attributed, under
the rules of section 4(a)(3) of this Act, to a particular
taxing jurisdiction;
(7) the term ``seller'' means a seller of goods or
services; and
(8) the term ``Uniform'' refers to interstate uniformity.
Mr. GEKAS. Mr. Chairman, on that I reserve a point of order.
The CHAIRMAN. The gentleman from Pennsylvania (Mr. Gekas) reserves a
point of order.
Mr. BACHUS. Mr. Chairman, we have heard a lot of discussion this
morning to the effect that this legislation affects sales tax. Others
have said that this legislation does not affect sales tax. We've heard
that this legislation threatens funding for local governments and State
governments. We have also heard that this legislation has nothing to do
with reducing funding for State and local funding.
The truth, Mr. Chairman, lies somewhere in between. The truth is that
this legislation alone does not address sales tax. This legislation
alone does not affect the States' ability to collect sales tax, to fund
law enforcement, to fund education. However, there is a fear, a
legitimate fear, that this legislation may slow the process of
addressing the states and their ability to collect sales and use taxes.
This is an important issue.
Now, let me say first of all, we say that this legislation extends
``the moratorium.'' What is the meaning of ``extends the moratorium?''
Well, the
[[Page H2803]]
Internet Tax Freedom Act of 1998 banned taxes on Internet access and it
banned multiple or discriminatory taxes on electronic commerce. The Act
did not ban the collection of sales and use taxes on sales made over
the Internet. I repeat, the Act did not ban the collection of sales and
use taxes on sales made over the Internet. So extending this moratorium
will not ban the collection of sales and use taxes.
Now, what is the current law? Under current law, sales or actually
use taxes are already imposed on all remote sales. If the remote
retailer has a physical presence in the State, a store, a warehouse
where the buyer is, then the retailer is required to collect and remit
a sales tax. However, under the Supreme Court decision, 1992 decision,
Quill decision, they said, if the remote retailer does not have a nexus
or sufficient physical presence in the State, then the State cannot
compel collection of sales tax. The buyer, however, is required to pay
the use tax to their home taxing jurisdiction. Now, there is the rub.
The use tax is not highly enforced, the compliance is very low. So when
these sales are made over the Internet, then the State, in fact, does
lose a sizable chunk of revenue. They will continue to do so until this
issue is addressed with some reliable mechanism for collection from
remote sellers.
The Supreme Court decision, the Quill decision has resulted in the
situation where large Internet retailers, without stores in a State,
are not required to collect sales tax, while other brick and mortar
stores, or even an e-commerce firm with a warehouse or an office in a
State, they are required to collect taxes on all sales. So we have an
inequitable situation, and I think we all realize that. It's unfair.
It's preferential. It should not be allowed to continue unaddressed.
In the 1992 Supreme Court case, the Supreme Court actually said, this
is a situation that Congress can address. I agree. This is something
that Congress, under the interstate commerce clause, should address.
They made it clear that we had the authority to take action to cure
this inequity. We have not done that since 1992.
Now, because I support a level playing field, and that is where in-
store, catalog and on-line sales have the same tax collection
treatment, I am introducing my amendment. I am introducing it also
because, without this amendment, without us addressing this inequity in
sales tax treatment, we are putting at jeopardy our local communities,
the welfare of our children, the safety on our streets, because it is
the sales and use tax proceeds that fund education in most States. It
is the sales tax which funds local government. It is the sales tax
which pays for police and fire protection.
In my own State, almost 50 percent of all State and local revenues
are sales tax. In some States, over 50 percent are sales tax.
Now, Mr. Chairman, as I said earlier, there is a fear, there is a
concern that merely extending the current moratorium does not address
the main issue, and that is allowing States to require remote retailers
to collect and remit sales tax. There is a fear among retailers and
among 42 of the governors who have expressed this fear to us that
merely extending the moratorium will only delay a decision on the issue
of the States being able to collect sales tax.
The CHAIRMAN. The time of the gentleman from Alabama (Mr. Bachus) has
expired.
(By unanimous consent, Mr. Bachus was allowed to proceed for 3
additional minutes.)
Mr. BACHUS. Mr. Chairman, as I said, the 42 governors have expressed
a concern, and that concern is, will extending the moratorium delay a
decision on the issue of allowing States to require remote retailers to
collect and remit sales taxes. They have said that if that is the case,
that we should not move for a moratorium.
Now, Mr. Chairman, I have assurances that is not the case. I have
assurances that the issue will be addressed. I have offered this
amendment to address the situation. My amendment would authorize States
to develop and enter into an interstate sales and use tax compact. The
legislation would provide that States joining the compact would be
required to adopt a simplified sales tax system. In turn, States
adopting the simplified system would automatically be authorized to
require remote sellers above the sales volume threshold to collect use
tax on all taxable sales into a State. Retailers would also be provided
a collection allowance to offset the cost of compliance.
What that would do, Mr. Chairman, is give a level playing field to
all sales. The legislation would provide a framework for
simplification, allowing States to require collection when the States
achieve simplification, and I think it is a reasonable and necessary
step for this Congress to take to pass this legislation. Merely
extending the moratorium while failing to deal with this underlying
problem I think would be irresponsible. We can deal with it. This
Congress can and should deal with it this session.
I have assurances that the Committee on the Judiciary is going to
take up this issue next week. For that reason, I am going to support
the legislation on the floor. I am doing it despite my concern and that
of both governors and the retailers, in that I have assurances that we
will address this issue and that we will address it this year. I hope
that my trust in this institution is well founded.
Let me say, in closing, this: ``The governors have made this request
of the Congress. They have requested Congress to create incentives for
States to streamline and simplify their sales tax systems so that
remote sellers, whether Internet, catalog, or whatever, can collect
sales and use tax as simply and easily as other retailers do, applying
them only when companies surpass a minimal level to justify the
burden.''
I think there is almost unanimous agreement in this body that we need
to move in this direction For that reason, I am offering this
amendment.
However, Mr. Chairman, I am told that it is not germane to this
legislation, so I will withdraw the amendment, but I do so strongly
urging this Congress to address this issue. If we pass this moratorium
and we do not address this issue, we do it at the peril of local
government, of educating our children, of all of the fears and concerns
that have been raised by the opponents of this legislation. If we pass
this moratorium and then we take up legislation to address this issue,
then we will have the best of both worlds.
Mr. Chairman, at this time, I ask unanimous consent to withdraw the
amendment.
The CHAIRMAN pro tempore. Is there objection to the request of the
gentleman from Alabama?
There was no objection.
Amendment Offered by Mr. Delahunt
Mr. DELAHUNT. Mr. Chairman, I offer an amendment.
The Clerk read as follows:
Amendment offered by Mr. Delahunt:
Strike sections 2 and 3, and insert the following (and make
such technical and conforming changes as may be appropriate):
SEC. 2. 2-YEAR EXTENSION OF MORATORIUM ON STATE AND LOCAL
TAXES ON THE INTERNET.
Section 1101(a) of title XI of division C of Public Law
105-277 (112 Stat. 2681-719; 47 U.S.C. 151 note) is amended
by striking ``3 years after the date of the enactment of this
Act'' and inserting ``October 21, 2003''.
Mr. DELAHUNT (during the reading). Mr. Chairman, I ask unanimous
consent that the amendment be considered as read and printed in the
Record.
The CHAIRMAN pro tempore. Is there objection to the request of the
gentleman from Massachusetts?
There was no objection.
Mr. DELAHUNT. Mr. Chairman, I am pleased to join with the gentleman
from South Dakota (Mr. Thune) in offering this amendment. It would
extend the Internet tax moratorium for 2 years rather than 5 years
beyond its current expiration date to October 21, 2003, and it would
leave in place the existing provisions grandfathering the 10 States
that had some form of Internet tax-related tax when the moratorium was
first enacted in 1998.
The amendment would allow the States a reasonable extension of time
to simplify their system for taxing transactions so as to foster the
growth of electronic commerce, while continuing to meet their
responsibilities to provide essential services to their citizens.
Let me be clear, Mr. Chairman. I support the moratorium. In fact, I
was among its early cosponsors, because it did seem essential to me
that Congress provide sufficient breathing room and
[[Page H2804]]
time to develop a more uniform, efficient and fair and neutral system
of taxation. Over the past 2 years, the States have made considerable
headway in this effort. I see no reason why it should take them 5 more
years to complete it. In fact, a full 5-year extension, all it will do
is eliminate a major incentive to address the real issues here.
That is why a 5-year extension is opposed by the National Governors'
Association, the National Conference of State Legislatures, the Council
of State Governments, the U.S. Conference of Mayors, and numerous other
groups, both business and labor. That is why a 5-year extension is
opposed by 36 governors, Republican and Democrats alike, including
Governor Leavitt of Utah, Governor Sundquist of Tennessee, Governor
Thompson of Wisconsin, Governor Ryan of Illinois, Governor Engler of
Michigan, Governor Ridge of Pennsylvania, and Governor Taft of Ohio.
These governors realize that a 5-year extension will accelerate the
erosion of the sales tax and diminish the ability of the States to fund
vital services. States that depend on the sales tax for as much as a
third to a half of their total revenues will be forced to either cut
spending or raise other taxes to make up the shortfall, the income tax
or the property tax.
{time} 1245
That is why the administration opposes the 5-year extension.
Let me read the statement of administration policy issued yesterday,
May 9: ``The administration would support a 2-year extension of the
current moratorium. The proposed 5-year extension would significantly
reduce the incentive for States to simplify their tax systems right
now, to the detriment of all interested parties, particularly small
business.''
We talk about encouraging e-commerce. A 5-year extension discourages
Internet sales. A 2-year extension fosters and embraces e-commerce.
The only information, the only hard data that we have so far, it is
not simply rhetoric, it is evidence and it is clear and convincing,
State governments lost $525 million in taxes on online sales last year
alone. That is only the beginning. Unless there is a system in place
that enables the States to collect taxes on the sales, they will lose
more than $20 billion per year by 2003.
In conclusion, Mr. Chairman, the Delahunt-Thune amendment would
provide a reasonable extension of the moratorium without changing the
rules in midstream and without eliminating the incentive for all
interested parties to devise an efficient, equitable, and technology-
neutral system for the taxation of sales of goods and services, whether
it be online or in the stores, in our communities and neighborhoods.
I urge support for the amendment.
Mr. GOODLATTE. Mr. Chairman, I rise in strong opposition to this
amendment.
Mr. Chairman, this amendment will have the effect of shortening of
length of time that taxpayers of this country are protected from some
of the most regressive taxes that we can imagine, taxes on access to
the Internet.
It is important to remind everybody again, this legislation had
absolutely nothing to do with the collection of sales taxes on the
Internet. That issue is going to be addressed starting with hearings in
the Committee on the Judiciary this month. If we are going to try to
mix these two things together, we are going to do so to the great
detriment of the American people.
Five years is actually a compromise. There were members of the
Committee on the Judiciary who wanted to make this extension permanent.
And why not make it permanent? After all, permanent extension of very
unfair taxes on people's charges, the things that show up on their
bills from their Internet service provider companies, where they have
to pay $2, $3, $5, whatever the charge might be to be able to just get
online and to experience all the benefits of the Internet, we have to
pay that same amount no matter what our level of income is, that is a
real effort to dig the hole deeper that many people have called the
digital divide. The way to close that divide and get every American on
the Internet is to eliminate these access charges.
I oppose it for that reason. I also oppose it because it takes away
something we have done in this legislation, and that is to stop some
States who were grandfathered under the old law from being able to
continue these very unfair access charges.
This bill ends those grandfathered provisions in the bill. This
amendment takes that away. So to me, when I hear the other side talking
about fairness, yes, if they want to talk about sales tax fairness, I
would love to participate in that debate at another time. If we want to
really talk about fairness, let us have a law that applies fairly to
everybody with regard to these very unfair taxes on access to the
Internet.
Five years is the amount recommended by the Commission report. At the
appropriate time, I will introduce a letter that I have just received
addressed to the Speaker of the House and asked to be made in order in
the full House, a letter from my Governor, who was the chairman of this
Commission, strongly endorsing the provisions of this legislation as
they stand.
It is my hope that we will follow it, because it was not just the
majority who wanted the 5-year extension of this moratorium. Governor
Leavitt, the opponent of the recommendations of Governor Gilmore, his
alternative proposal included a 5-year extension of the moratorium on
these very unfair taxes on access to the Internet.
So if we are going to be fair and we are going to recognize a truly
consensus opinion, we ought to go forward with the 5-year extension and
reject a 2-year extension, which quite simply puts the taxpayer in this
country at jeopardy in a short period of time of again facing these
very unfair, regressive charges that have nothing to do with the
imposition of sales taxes on the Internet.
There is nothing to prevent the Congress or the States from
addressing the sales tax issue individually, collectively, in
cooperation with the Congress, at any time during this extension of the
moratorium.
So this 2-year extension is simply a way of taking away from
taxpayers a protection against an unfair tax that creates this digital
divide. Instead, I would hope that everyone would reject this amendment
and promote closing the digital divide by removing some of the most
unfair taxes on the Internet. Some that exist now in some States, they
should be removed, and in the States that are under the current
moratorium, that moratorium should be extended for 5 years.
(Mr. CONYERS asked and was given permission to revise and extend his
remarks.)
Mr. CONYERS. Mr. Chairman, I rise in support of the amendment.
Mr. Chairman, at last, a bipartisan amendment has arrived on the
floor. We put our arms around it and thank the gentleman from
Massachusetts (Mr. Delahunt) and the gentleman from North Carolina, who
have recognized that if we limit this extension of the present
moratorium on Internet access taxes and discriminatory taxes for 2
years, we will have arrived at a place that most of us will be much
happier about.
It is unfortunate that the speaker before me has not seen the letter
in which the Governors are asking us to please, please take into
consideration the fact that they want their taxes extended. Twenty-two
of them are Republican Governors.
I believe that this 2-year extension is a far more appropriate period
for the moratorium. It is my hope that by such time the States could
build on the very serious steps they have already begun to reform and
simplify their laws. Then we could consider whether we want to approve
any interstate process affecting these simplification efforts. If the
States were not making progress by 2003, it would be a simple matter to
extend the moratorium for an additional period of time if that were
needed.
By contrast, there is a real risk that extending the moratorium
through 2006 would, in effect, delay this issue and create a situation
where the States have no incentive for reform. This would have the
effect of codifying into the law the present Byzantine, unmanageable,
complex State tax system which harms both consumers and business.
So this is why so many concerns have been raised about a 5-year
extension. It is too long. It is opposed by the administration, which
has written that ``The proposed 5-year extension would significantly
reduce the incentive for
[[Page H2805]]
States to simplify their tax systems, to the detriment of all
interested parties,'' but especially hurt would be small businesses.
A 5-year extension is also opposed by the National Governors
Association. Read the letter. It is now on the Record. It is opposed by
labor, the AFL-CIO, the NEA, the AFT, AFCSME, and by business through
the National Retail Federation, the Wal-Marts, the Sears, the Home
Depot and K-Mart, and many, many others.
So we have arrived at a place where we can all come together,
Republicans and Democrats, high-tech supporters and brick and mortar
people. Let us come around to the Delahunt-Thune proposal now before
the floor, now on the floor, which would give a 2-year extension, no
more 5-year extension, a 2-year extension that would give our own
committee the opportunity to hold the hearings and to deal with the
realities and complexities of these problems on a sober and bipartisan
basis to solve these very large problems that are facing us.
Such a process has been sorely missing to date in our headlong rush
to the floor to secure political points. For that reason, my
commendations to the gentleman from North Carolina and to my dear
friend, the gentleman from Massachusetts (Mr. Delahunt). I urge that
their amendment be given further consideration.
Mr. THUNE. Mr. Chairman, I move to strike the last word.
Mr. Chairman, let me, just for the point of the Record, say that the
State is South Dakota, not North Carolina. But I am sure North Carolina
cares very deeply about this.
I say to the gentleman from Michigan, let me just speak to this
issue, if I might, in favor of this amendment, for a couple of reasons.
I think it is critical in the time that I have been here in Congress,
and actually prior to the time that I arrived here.
I have heard a lot of debates about how important it was that we move
power out of Washington, D.C. and decision-making out of Washington,
D.C. and give more power to the States, because we trust the ability of
the individual States to make decisions about what is in their best
interest.
That is I believe what is at stake here in this debate today. That is
the issue of States' rights, and whether or not those States who have
chosen already to employ certain taxes should be allowed to continue
along those lines.
The amendment we have before us right now would restore States'
rights on Internet services. The Tax Freedom Act which we adopted a
couple years ago grandfathered those States which imposed, actually
imposed such a tax prior to enactment. This amendment would allow those
grandfathered States to assess taxes on Internet services in the same
manner as other services.
I want to make one thing very clear here. In my State of South
Dakota, and I think it is fair to say that the vast majority of States
who are impacted by this who already had provisions in law, we are not
talking about a new tax on Internet services that is in any way
discriminatory. This simply allows them to assess the sales tax which
is currently being assessed on this service.
In our State of South Dakota this is a very important issue. We do
not have an income tax. Fifty-three percent of our State's revenue is
raised by the sales tax. This bill fundamentally represents an attack
on the revenue base of our State. Our municipalities also, that is
their primary way of running their operation. They are very dependent
upon the sales tax. Main Street businesses agree that there should be
tax equity and tax fairness.
I would say to my colleagues who are looking at this issue and trying
to determine how they might want to vote that what we are attempting to
accomplish here is nothing more than was done in 1998 when we acted on
this last time. That is to grandfather those States, about eight States
around the country, who already have provisions in law that allow them
to tax equally these services in the same manner that all other
services are taxed. We are not talking about a new tax.
I think my record in this body as a tax cutter is clear. This
amendment does not address the issue of tax on Internet sales or the
question of permanent charges. What it does do is allow those States
that currently have a sales tax in place to continue to apply that tax
in equal manner on Internet services, just like they would on any other
service in their States.
Mr. Chairman, what I would simply say today is that as Members look
at this issue, there are a couple of things to keep in mind. One is
that what we are talking about here really I think in a very
fundamental way is the rights of States.
As I said earlier, I believe in the debates we have held in this
House since I have been here, we have talked a philosophical vein about
how better to shift power and decision-making back to the States. What
we are telling the States today is we are sorry, they cannot do it this
way, and we are going to deprive them of a revenue source that they
have chosen to adopt in terms of raising revenue to run their
operation.
{time} 1300
And the other issue very simply I would say, too, is a matter of tax
equity, and that is, this is not a discriminatory tax Internet
services, this is the same tax that is applied to all other services
across this country or across our State, at least, and I think to the
other States that are affected by this.
One other point I would make with respect to the moratorium, and the
gentleman from Massachusetts has spoken to that, but the current
moratorium does not expire until October 21, 2001. This amendment would
extend the moratorium an additional 2 years, that gives us 3\1/2\ years
in which to address this issue.
I believe that to be ample amount of time. Furthermore, I think the
longer that we extend that deadline into the future, the less pressure
there is on this institution to grapple with and deal what is going to
be a very important issue to our States, our municipalities and our
small businesses.
I would also add that this is one of the very rare issues in my
experience here in Congress where I have the business community in my
State, municipal leadership, State leadership, our governor, all on the
same side of the issue. This is an issue which impacts small businesses
across our State, many of our businesses, small retailers and Main
Streets across South Dakota are already at a competitive disadvantage
in a lot of ways to catalog sales, but the Internet services that are
underway today, the sales that occur there are yet another way in which
they are put at a competitive disadvantage.
Mr. Chairman, I believe that this is an issue which cries out for a
fix. I think it is going to be incumbent upon this Congress to act in a
way that would enable our States to address this issue to resolve it,
and to have a stable and predictable revenue source as they head into
the future.
I would simply say to my colleagues that I believe this amendment to
be a sound amendment. I do think it provides ample time in which to
resolve these issues, and furthermore, it eliminates the provision that
would penalize those States that already, in law, have chosen in a
nondiscriminatory way, in an equal way, in a neutral way to tax all
their services at the same level. I urge the adoption of the amendment.
Mr. NADLER. Mr. Chairman, I move to strike the requisite number of
words.
Mr. Chairman, let me start by making two comments on some things that
have been said before by some opponents of the amendment, the gentleman
from Pennsylvania, the gentleman from Virginia. It was said that this
bill seeks to give effect to the recommendations of the commission, the
commission that was appointed under the first Internet moratorium bill,
which I supported 2 years ago. It simply is not true. The commission
made no recommendations whatsoever.
The law establishing the commission was very careful to specify that
the commission could only make a recommendation of anything by a two-
thirds vote. The commission was divided, nothing got a two-thirds vote.
The chairman of the commission, the governor of Virginia, took it upon
himself to disobey the law, and in the name of the commission, to make
a recommendation, even though it did not have the two-thirds vote.
We should give no weight to those recommendations as recommendations
of the commission. They are recommendations of some members of the
[[Page H2806]]
commission. The commission made no recommendation whatsoever, because
they could not agree.
Second, we are told that by supporting a 2-year moratorium, we are
going to be very unfair to business. We are going to be very unfair. Is
the governor of Ohio, Mr. Taft, suggesting very unfair provisions? Is
Governor Ridge suggesting unfair provisions, Governor Leavitt, Governor
Thompson, Governor Engler, most of the Democratic governors in this
country, are they all being very unfair here or are they all simply
being prudent and asking us not to interfere with the welfare of their
States, which is what I think is happening.
Let us go back to basics here as we look at this amendment and as we
look at this bill. The Internet is a great thing. We want to promote
its growth. We do not want burdensome or unfair taxation to inhibit its
growth. There are certain problems that arise when we talk about how to
tax the Internet.
Mr. Chairman, there are 6,000 jurisdictions in this country, and it
might very well be burdensome to say okay, if you ordered something in
New York from a seller in Wisconsin and the signals go through 22 other
States, however the Internet is routed, I do not understand it, there
may have 22 different States levying sales tax or trying to, and who
knows how many jurisdictions, obviously we cannot have that.
We have to figure out a different way of doing that. We have to
simplify it so that it is not a burdensome thing for an Internet
company or a seller over the Internet to adhere to the law and to levy
or collect a tax.
Fine, to figure out how to do that, we enacted a 3-year moratorium,
and we appointed a commission, the States are working it out. The
governors tell us it will take another year or two to work a very
simplified sales tax, uniform sales tax system throughout the country
that will permit a simplified collection that would not be burdensome;
okay, that makes sense.
We also want to make sure that everybody is on the level playing
field. We know that the economy grows fastest. We know that economic
growth is greatest, productivity is greatest, wealth creation is
greatest when economic decisions are made on the basis of economics.
When people in the private sector make their decisions what to buy,
what not to buy, how to ship their goods, how to order something, where
to buy it from, on the basis of efficiency and economic utility not on
the basis of taxes. So we want taxes insofar as possible not to affect
economic decisions.
If you want to order something, whether you order it by walking into
the store on Main Street or into the mall a couple miles away or from a
catalog seller or over the Internet, should be decided on the basis of
any number of factors, but not on the basis that one has an advantage
of tax over the other.
Mr. Chairman, that is an improper consideration. If the Internet is
going to grow, and it is, it ought to be on its own merits. If brick-
and-mortar companies are going to be advantaged or disadvantaged, it
should be on the basis of their economic advantage, not on the basis of
tax advantage or disadvantage, that, too, is something we have to make
sure we do right, that taxes raise revenue, but do not unfairly
advantage one sector over another because it is unfair. It inhibits the
growth of the economy; that we have to make sure we do.
A 2-year moratorium extension, especially a year in advance of the
moratorium end that we have, we have another year and 16 months to go
into the existing moratorium, gives ample time to figure all of this
out. A 5-year moratorium would be another 6 years, as was said by the
gentleman from South Dakota (Mr. Thune), would freeze into practice too
many practices, it might be impossible to change them 6 years from now,
especially at the rate that things are growing.
Now, we are told that this bill does not deal with the sales tax
question. It is true, it does not. But to allow half a solution and not
the other half would freeze things, and that we should not do.
Ms. JACKSON-LEE of Texas. Mr. Chairman, I move to strike the
requisite number of words.
Mr. Chairman, I rise to support the Delahunt amendment, and to make
the arguments that, as I indicated in general debate, it amazes me that
we would rush to the floor of the House to deprive 10 States,
comprising a large population of the United States, their inherent
rights. The right to make independent assessments and determinations as
to how they collect revenue.
Now, I am prepared to spend a lot of time in hearings. I think it is
extremely important that this body acts as a fact-finder. It is
interesting that, having participated in the revising of the
Telecommunications Act or the revising of telecommunications in the
United States by way of the Telecommunications Act in 1996, I
understand those who preceded me in tenure indicated that that process
lasted many, many long years. But yet today in the year 2000, we are
confronting issues in the Telecommunications Act that are sticking
points and have not been resolved, because all legislative initiatives
cannot foresee down the road what the problems may be.
Mr. Chairman, we have problems with the Telecommunications Act right
now as we speak. But yet we want to precipitously deny the rights of 10
states, some 17 million citizens in the State of Texas and many others
around the Nation, with the limited amount of hearings and
understanding of how we can best encourage E-commerce and, as well,
address the needs of those such as the State of Texas that would lose
over $1 billion in revenue.
I cannot understand why, in fact, there is such an urgency with 8
months out, I believe, a time frame in which we can study the issues
appropriately. I will subsequently add an amendment or debate an
amendment that I will offer that adheres to the 5 years, but
grandfathers the State in. I believe it is crucial that we are fact-
finders and that we get the information. This will deny the cities of
this Nation, the States of this Nation, the opportunity to provide
reasonable revenue for health care and for education.
Then, secondarily, though there are 37 million people who may access
the Internet. And I might say in Texas, we allow $25 worth of access
fees that are nontaxable, so we are sensitive to the idea of opening up
the Internet. But this will be denying these individuals the
opportunity for resources that they greatly need.
I do not know how this Congress can do it. Particularly a Congress
that represents itself to be respectful of States rights. This is
harming 10 States and harming the State of Texas. I believe we should
seek a moratorium that allows us to stay this issue. I believe,
however, that we should not take away the rights of those 10 States
and, more importantly, I do not think we should move precipitously when
we really do not know the best way to approach this.
Mr. Chairman, my last point is to simply say as much as we may not
want to view this as an equity question, it seems to me that we should
consider all of those individuals who go into stores and buy their
goods. And I disagree with any comparison that this is like a fee going
into a shopping mall. It is not. Consumers are on the Internet and
buying the goods right there. They go into a store we pay sales tax.
Let us be fair and make sure that we have a situation where we respect
those States who have already opted to make their choices on taxation.
Mr. COX. Mr. Chairman, I move to strike the requisite number of
words.
Mr. Chairman, I would like to respond to the comments that were just
made. It is suggested that a continuation of the status quo, which
protects users of the Internet from discriminatory taxation, would
somehow harm the State of Texas. But the State of Texas is increasing
its tax take under the status quo. As a matter of fact, sales tax
collections in the State of Texas for the year we have just completed
are up 5 percent.
The same is true across the country. There is not a State in America
that is not better off now than it was before the passage of the
Internet Tax Freedom Act and the two are not disconnected, because the
growth of the new economy is fueling a growth in American productivity
and a record increase in jobs and a flood of revenues to government at
all levels.
There is no revenue impairment. There is no revenue loss. There is
more taxation and more collection of taxes
[[Page H2807]]
for State and local governments, and for the Federal Government, than
ever before in our Nation's history.
Mr. Chairman, let us look at the figures. At the end of 1999, all 50
States were in surplus. The States finished 1999 with $35 billion in
total surpluses. And that is at the same time that they were growing
their spending by nearly 8 percent on average. Total tax collections
among the 50 States are up not by 1 percent, not by 2 percent, not by 3
or 4 percent, the range of our economic growth, but by 11 percent.
Total tax collections among the States, up 11 percent from $420 billion
in 1998 to $466 billion in 1999.
We do not need more taxes. We do not need discriminatory taxes. We do
not need double taxation. And all that this bill does, all that it
does, is ban discriminatory taxes and multiple taxes. So I need to know
which one, which kind of taxes, the discriminatory ones or the multiple
ones, the opponents of this legislation are in favor of.
But in my view, there should not be a moratorium. There should be a
permanent ban on such taxes. We should not have discriminatory taxes
against the Internet and we should not have multiple taxation. Two
States should not tax the same commerce twice. One State ought to do
that, and that is what this legislation wisely does.
Now, in truth the debate is not about what it seems to be about. We
are not really arguing about that. Instead, people are taking a very
good piece of legislation, the Internet Tax Freedom Act, and they are
holding it hostage. They are saying, ``All right. We agree with you,
there should not be multiple taxation. There should not be
discriminatory taxation. But we have another issue with sales taxes and
we would like you to address that some time, and we think that only if
we take this perfectly good piece of legislation and hold it hostage
will you listen to us.''
{time} 1315
I remember once when I was in college, I think, maybe I was a little
older than that, the National Lampoon put out one of their magazines.
Some of my colleagues have seen the National Lampoon, and it had a very
clever cover. On the cover was this adorable little puppy with a gun to
its head. It said, ``Buy this magazine or we will shoot this dog.'' Of
course the message was meant to be humorous, but it is an illustration
of the legislative tactic at work here.
People do not like the fact that they have a Supreme Court decision
that impairs State sales tax collection on remote sales. They would
like Congress to address that legislatively under our Article I,
Section 8 power. Because that is not what we are debating here on the
floor today, they want to take this piece of legislation hostage and
say, well, at least it is about the Internet. Let us slow down this
legislation and make them add on to this other issue.
That would be a bad idea because what it would mean is that people
would not have the certainty that they now have that we are not going
to at the Federal level, we are not going to at the State level, and we
are not going to at the local level impose discriminatory taxes on the
Internet that tax the Internet when the off-line commerce would not be
taxed in the same way or multiple taxes on the Internet. We are not
going to tax Internet access because we really do care about the
digital divide.
If my colleagues care about the digital divide, do not pile new taxes
on Internet access. That is what the existing legislation, which this
would extend, prevents. There are many good reasons, but none more
significant than the flood of revenues to our States to support the
Internet Tax Freedom Act and its extension in the form of the Internet
Nondiscrimination Act.
For those reasons, I urge strongly that we oppose the amendment.
Mr. ROGAN. Mr. Chairman, I move to strike the requisite number of
words.
Mr. Chairman, first I want to associate myself with the gentleman
from California (Mr. Cox). I think that he has hit the nail directly on
the head.
Mr. Chairman, I am pleased to yield to the gentleman from Virginia
(Mr. Goodlatte).
Mr. GOODLATTE. Mr. Chairman, I thank the gentleman from California
for yielding to me.
Mr. Chairman, Congress created the Advisory Commission on Electronic
Commerce in 1998. The purpose of the Commission was to study the
Internet taxation issue and submit a report of its findings to the
Congress. The Commission consists of representatives from State and
local governments, the administration, the business community, and
others.
In its recent report to Congress, the Commission suggested that the
Internet tax moratorium that was in existence, created at the same time
the Commission was created, be extended for 5 years. While there was
disagreement on several Internet tax issues, which we are not
addressing today, including the sales tax issue, which some want to
keep bringing up, there was complete agreement on a 5-year moratorium
extension.
While Congress is not bound by the Commission's report, we should
follow its suggestions unless there is good reason to do otherwise.
After all, that is why Congress created a Commission. No good reason
exists to deviate from the Commission's suggestion that the moratorium
be extended for 5 years.
Choosing to extend the moratorium for 2 years is completely
arbitrary. There is no evidence that a 2-year extension is better than
the Commission's suggestion of 5 years. Again, Congress should follow
the Commission's lead, especially on an issue where there was complete
agreement unless there is good reason not to, which does not exist
here.
While it is true that the recent Commission report was not supported
by two-thirds of the commissioners, which was a requirement for
submitting formal recommendations to Congress, it is also true that
some of the issues examined by the Commission were supported by two-
thirds of the commissioners. Extending the moratorium for 5 years was
one of those issues.
If we take this amendment and extend it only 2 years, we are
depriving the American taxpayers a protection against one of the most
unfair, most regressive taxes one can imagine.
Sales taxes, which the gentleman wants to take up and find a way to
impose on people who buy goods and services on the Internet, they are
regressive taxes because, generally speaking, they hit lower income
people harder than other taxes.
But taxes on access to the Internet, which is what we are addressing
in this bill, not the sales taxes, are far more regressive because,
regardless of one's income, regardless of one's wealth, one pays the
same amount of tax for that access to the Internet.
So, again, for everyone here who wants to close the so-called digital
divide and make sure that every American has the opportunity to have
access to the Internet for the educational benefits that arise from it
and the ability to do business on it to have jobs related to it, to be
able to shop on the Internet, to be able to advocate political points
of view on the Internet, we should not be allowing a tax on that
access.
So we should extend this moratorium as long as we could. But we
certainly should extend it no less than what the two-thirds majority of
the commissioners recommended, what the Committee on the Judiciary has
recommended, because we are, in effect, simply keeping people free from
some of the worst taxes that one can possibly impose.
I urge my colleagues again to reject this amendment.
Amendment Offered By Mr. Chabot to the Amendment Offered By Mr.
Delahunt
Mr. CHABOT. Mr. Chairman, I offer an amendment to the amendment.
The Clerk read as follows:
Amendment offered by Mr. Chabot to the amendment offered by
Mr. Delahunt:
Strike line 1 and all that follows through the end of the
amendment, and insert the following (and make such technical
and conforming changes as may be appropriate):
SEC. 2. COMPREHENSIVE AND PERMANENT MORATORIUM ON STATE AND
LOCAL TAXES ON THE INTERNET.
(a) Comprehensive and Permanent Moratorium.--Section 1101
of title XI of division C of Public Law 105-277 (112 Stat.
2681-719; 47 U.S.C. 151 note) is amended--
(1) in subsection (a)--
(A) by striking ``3 years'' and inserting ``99 years'', and
(B) in paragraph (1) by striking ``, unless'' and all that
follows through ``1998'',
(2) by striking subsection (d), and
[[Page H2808]]
(3) by redesignating subsections (e) and (f) as subsections
(d) and (e), respectively.
(b) Technical Amendment.--Section 1104(10) of title XI of
division C of Public Law 105-277 (112 Stat. 2681-719; 47
U.S.C. 151 note) is amended by striking ``unless'' and all
that follows through ``1998''.
Mr. CHABOT (during the reading). Mr. Chairman, I ask unanimous
consent that the amendment be considered as read and printed in the
Record.
The CHAIRMAN. Is there objection to the request of the gentleman from
Ohio?
There was no objection.
Mr. CHABOT. Mr. Chairman, this is a perfecting amendment to the
Delahunt amendment. The intent of the amendment is to make the
moratorium permanent. For parliamentary reasons, it was necessary to
pick a date specific, a certain amount of time. In this case, we chose
99 years, which, in essence, effectively makes the moratorium
permanent.
Mr. Chairman, back in 1998, I worked with the gentleman from
California (Mr. Cox) to introduce and push legislation that would place
a moratorium on Internet taxation. The effort resulted in the passage
of the Internet Tax Freedom Act, which placed a 3-year moratorium on
three particular types of Internet taxation: taxes on access charges,
multiple taxes, and discriminatory taxes.
At that time, we were warned of the dire consequences for State and
local governments if such a moratorium were enacted. However, contrary
to these concerns, the moratorium has proved to be quite successful.
Since enactment of the Internet Freedom Act, millions of Americans
have gained access to the Internet, and electronic commerce has grown
exponentially. The Internet economy has created millions of new jobs,
and new economic opportunities for Internet businesses as well as more
traditional companies.
As a result of this rapid expansion, most State and local governments
are experiencing massive increases in tax revenues and record budget
surpluses. There has been a lot of talk in this Chamber about bridging
the so-called digital divide and providing all Americans with access to
the Internet.
According to a Department of Commerce report released last July, only
12 percent of those households with combined incomes from $20,000 to
$25,000 have Internet access, compared to 60 percent of those
households earning $75,000 or more. Raising taxes and increasing prices
on consumers will only make that situation worse.
The most reliable way to ensure that Internet access is available to
all is to help keep prices and costs low. By extending the moratorium
and permanently banning Internet access taxes, we can lower future
costs and ensure that Internet access remains affordable for all
Americans.
Mr. Chairman, thriving new industries have always been prime targets
for new and discriminatory taxation in this country. For example, our
constituents are still paying for the Spanish-American War courtesy of
an excise tax on telephone use enacted all the way back in 1898 and
still on the books. If we do not act affirmatively to protect the
Internet, it will soon be subject to these same types of bogus charges
which can hinder its growth, raise prices, and hurt consumers.
By merely extending the current moratorium rather than making it
permanent, Congress is leaving the flood gates open for a tidal wave of
future taxation, which could cripple this vital technology. It is time
to slam those gates shut, lock them tightly, and throw away the key.
If we do not enact a permanent moratorium and, instead, continue to
pass temporary extensions, no one, not State and local government
entities, not the Internet business community, and not the consumers,
will know what the future may bring. By enacting a permanent ban ,we
can end this uncertainty and allow the Internet to flourish, free from
the threat of future taxation.
Mr. Chairman, we have an obligation to pass this proposal today. The
Internet is a global network, and subjecting it to a myriad of State
and local access taxes will cripple its development and prevent some
families from gaining access to this wonderful tool.
I urge my colleagues to protect our constituents' access to this
thriving technology and vote to make this moratorium permanent.
Mr. NADLER. Mr. Chairman, I rise in opposition to the perfecting
amendment.
Mr. Chairman, I rise in opposition to the amendment offered by the
gentleman from Ohio (Mr. Chabot) which would provide for a permanent
extension of the moratorium on Internet taxation.
I obviously do not support multiple or discriminatory taxes, but I
oppose a permanent moratorium because I fear, if we pass a permanent
moratorium, we will never return to the more important issue of State
tax simplification. Failure to revisit this issue will harm all
interested parties: retailers, both electronic and otherwise, State and
local governments, and consumers.
The fact is that we have a moratorium in order to allow the States
and the Governors and the Federal Government to address the issue of
how one fairly taxes transactions conducted over this new medium,
without giving an advantage, without stifling it, without burdening it,
but also without giving it an unfair advantage over other types of
business and over other media for the conduct of business.
If we do not solve that problem, one of two things results. One could
have stifling taxation on the Internet which would inhibit its growth,
and that is why we want a moratorium to avoid that. I have no problem
with the moratorium. I was one of its sponsors 2 years ago.
Secondly, if we do not allow sales taxes on goods purchased over the
Internet, then we, to a very large extent, destroy the tax bases of
State and local government, and we give an unfair advantage to
purchases over the Internet compared with purchases not over the
Internet.
As I said before, the economy, the growth of the economy, the
efficiency of the economy demands that economic decisions be made on
economic bases, not in order to avoid tax by going in one direction and
not the other. That is a formula for less economic growth, less
economic efficiency, lower economic productivity.
If we make this moratorium permanent now, without dealing with the
problem of how to fairly and without undue burden taxing transactions
over the Internet, we may never get back to that.
The Internet entrepreneurs quite properly want relief and assurance
against future multiple or discriminatory tax. The moratorium gives
them that for the time being. But to give them that permanently without
dealing with the other half of the problem is probably to mean we will
never get to the other half of the problem. That is wrong.
Why rush? We are first having hearings on that question next week in
the Committee on the Judiciary. We should, from those hearings, come to
some agreement on how to deal with it legislatively. We do not have to
act now at all until those hearings and until we know what we are
doing, but we are acting anyway for purely political reasons.
The moratorium has another year to run. If we want to extend it 2
years, okay, so we have 3 years to solve this problem. A permanent
extension now, when the moratorium has not finished and we have another
year, is simply saying we do not care about solving the problem of
sales taxes; and that would lead, as the Washington Post notes in its
editorial today, to damage to our State and local governments which we
claim to care about.
I notice the cavalier attitude on the part of the majority of this
House today toward unfunded mandates in this bill. We give lip service
to opposing unfunded mandates. I do not mind them. I voted against the
unfunded mandates bill. But most of the Members in this House give lip
service to not imposing unfunded mandates in this bill, but we are
doing it even though one of the sponsors of this bill says he has no
idea the amount of the unfunded mandates. He does not want to take the
time to find out.
So I suggest that we should not have a permanent moratorium. A 2-year
moratorium is adequate to enable us to do what we have to do; namely,
figure out a rational and fair way of giving everyone fair and equal
taxation while burdening the Internet with multiple and discriminatory
taxation.
So I urge the defeat of the amendment.
[[Page H2809]]
Mr. Chairman, I yield to the gentleman from Massachusetts (Mr.
Delahunt).
{time} 1330
Mr. DELAHUNT. Madam Chairman, will the gentleman yield?
Mr. NADLER. I yield to the gentleman from Massachusetts.
Mr. DELAHUNT. Madam Chairman, I thank the gentleman for yielding to
me, and he did so for the purpose of my making a unanimous consent
request.
Madam Chairman, I ask unanimous consent that the time of the debate
on the perfecting amendment and the underlying amendment, the Delahunt-
Thune amendment, be limited to 10 minutes, to be divided equally
between the sides.
The CHAIRMAN pro tempore (Mrs. Biggert). Is there objection to the
request of the gentleman from Massachusetts?
Mr. GOODLATTE. Madam Chairman, reserving the right to object, the
gentleman has asked for a total of 20 minutes additional time?
Mr. DELAHUNT. Madam Chairman, will the gentleman yield?
Mr. GOODLATTE. I yield to the gentleman from Massachusetts.
Mr. DELAHUNT. I would advise the gentleman that I am asking for 10
minutes; that we should limit the time for the debate on the Chabot
perfecting amendment and my underlying amendment to 10 minutes, to be
divided equally between the sides.
Mr. GOODLATTE. Well, I am concerned that I have a lot of speakers
over here. How would that time be managed?
Mr. DELAHUNT. Well, if the gentleman will continue to yield, the
ranking member of the subcommittee would manage it for the opponents,
and I presume the gentleman from Ohio (Mr. Chabot) or the gentleman
from Virginia (Mr. Goodlatte) would manage it for the proponents.
Mr. GOODLATTE. And that is 10 minutes on each side?
Mr. DELAHUNT. That is 5 minutes on each side.
Mr. CHABOT. Madam Chairman, I object. There are a number of speakers,
I believe, who are interested in speaking on this amendment.
The CHAIRMAN pro tempore. Objection is heard.
parliamentary inquiry
Mr. ISTOOK. Madam Chairman, an inquiry of the Chair.
The CHAIRMAN pro tempore. The gentleman may state his parliamentary
inquiry.
Mr. ISTOOK. Madam Chairman, under the rule, is it correct that
remaining debate time, which must include the additional amendments
which have been prefiled and are to be offered the remaining time for
debate, is limited to 1 hour? So that if everyone keeps speaking on
this, they are effectively trying to stifle the consideration of other
amendments?
The CHAIRMAN pro tempore. The time for consideration will expire at
2:30.
Mr. ISTOOK. Will expire at 2:30. So that any time consumed by this
amendment, should it consume all the remaining time between now and
2:30, would have the effect of preventing the House from considering
the other pending amendments?
The CHAIRMAN pro tempore. That is correct. The Committee of the Whole
will have to conclude consideration of amendments at 2:30.
Mr. ISTOOK. Madam Chairman, is there any way that someone who, in
good faith, has sought to offer an amendment to this bill can avoid
this filibuster tactic?
The CHAIRMAN pro tempore. That is not a parliamentary inquiry.
Mr. ISTOOK. But it is a good point. I thank the Chair.
Mr. NADLER. Madam Chairman, may I inquire of someone over there how
much time, perhaps the gentleman from Virginia (Mr. Goodlatte), if 5
minutes on each side is not acceptable for a UC request, ask how much
might be?
Mr. GOODLATTE. I would have to defer to the gentleman whose amendment
is on the floor.
The CHAIRMAN pro tempore. The gentleman from Ohio (Mr. Chabot) may
respond.
Mr. NADLER. Would 10 and 10 be acceptable?
Mr. CHABOT. There are a number of speakers over here that have
indicated they want to have sufficient time to address this particular
amendment. I do not think it will take a tremendous amount of time, and
I would hope that we will have an opportunity to get to the amendment
of the gentleman from Oklahoma (Mr. Istook) or any other amendments
that might be offered.
Mr. NADLER. Would 10 minutes on each side be acceptable to the
gentleman?
Mr. CHABOT. Not at this point in time. The Committee on Rules set
this rule. I am not on the Committee on Rules, I do not know how many
folks sitting here are. But this is the rule we are dealing with. If we
could move on and have the Members who would like to speak on this
amendment, hopefully we will be able to have time to get to other
amendments. That is, I think, the goal of all of us.
The CHAIRMAN pro tempore. Is the gentleman from New York stating a
parliamentary inquiry?
Mr. NADLER. I am simply trying to ascertain if there is any amount of
time. I do not know what other amendments people have.
The CHAIRMAN pro tempore. Is the gentleman from New York stating a
unanimous consent request?
Mr. NADLER. Madam Chairman, I ask unanimous consent for a 20-minute
time limit for this debate, to be divided equally between the two
sides. That would allow 40 minutes for all other amendment combined.
Mr. COX. Reserving the right to object, Madam Chairman, I think this
discussion is consuming time off the clock, and that if we simply
proceeded with debate on the amendment that is already under
consideration, we could then proceed in order to the next amendment and
the next amendment.
I am aware, for example, that the amendment of the gentleman from
Oklahoma (Mr. Istook) is largely duplicative. It also is for 2 years,
which we are already debating. A lot of this debate is supportive of
debate on the other amendments as well. But I would urge we stop the
parliamentary infighting and just get back to our regular business.
I, therefore, object.
The CHAIRMAN pro tempore. Objection is heard.
Mr. ROGAN. Madam Chairman, I move to strike the last word.
Madam Chairman, I am pleased to support the amendment offered by my
friend and colleague, the gentleman from Ohio (Mr. Chabot) that would
make the moratorium on taxation on Internet access permanent. This
amendment will send a message that Congress is opposed to excessive
regulation and taxation of e-commerce.
There is little debate here today on the impact of the Internet on
our economy. Yet, despite its rapid growth, the Internet is still in
its technological infancy. The potential for growth and the creation of
new wealth is tremendous. This growth will continue to affect Americans
at all economic levels. This rising tide of economic expansion has and
will continue to lift all boats.
In fact, the largest growth potential remains in home-based
businesses. Goods, services and technology are available to consumers
around the globe as never before. Taxation on the Internet raises many
unanswered questions. Nationwide, there are some 6,000 competing
separate tax levying jurisdictions. Congress must act to ensure that
the electronic engine of our national economic growth is not unfairly
punished by any of these competing jurisdictions or by an unwieldy
combination of them.
Today, we have the opportunity to continue the explosion of
productivity and growth that we have seen from the Internet. From the
booming tech companies of the Atlantic to the heart of the Silicon
Valley, to those companies in my district in Los Angeles County, e-
commerce is touching the lives of all Americans. Internet companies are
fueling hometown economic revivals.
With this broad impact, Congress must act responsibly and decisively.
By passing the amendment of the gentleman from Ohio and the underlying
legislation, we will be sending a message that e-commerce is a
technology to be embraced and not choked under the heel of government
taxation.
I urge my colleagues to support this amendment offered by our
colleague from Ohio to enact a long-term ban on access to Internet
taxation.
Mr. DELAHUNT. Madam Chairman, I move to strike the requisite number
of words.
[[Page H2810]]
Mr. GANSKE. Madam Chairman, will the gentleman yield?
Mr. DELAHUNT. I yield to the gentleman from Iowa.
Mr. GANSKE. Madam Chairman, I rise in opposition reluctantly to the
amendment by my good friend from Ohio in favor of the amendment of the
gentleman from Massachusetts (Mr. Delahunt) and also, when it comes up,
the amendment offered by the gentleman from Oklahoma (Mr. Istook).
Madam Chairman, the Internet taxation issue is the number one issue
for small town business men and women in my district. They see this
lengthy moratorium on e-commerce taxes as unfair. They are paying taxes
and losing business to competitors who do not pay those taxes.
This tax policy gives on-line retailers a competitive advantage over
brick-and-mortar retailers. It is a myth that e-commerce needs
preferential tax treatment because it is a new industry. The Internet
has reached 50 million people in 4 years. Look at some of the earlier
breakthroughs. Radio needed 38 years to reach the same number of users;
television 13 years. So the Internet's development has been nothing
short of phenomenal. With that robust growth, requiring on-line
retailers to collect sales taxes will not harm their growth.
This is really a question of somebody else getting hurt. I agree with
Governor Leavitt of Utah when he said, ``You know, we all hate taxes.
But if we have to pay them, then at least they ought to be fair.'' At
the White House and in Congress we hear a lot about fair trading
practices. Let us talk about fair trade at home. Let us deal with the
issue promptly and not pass on it. Taxing some companies but not others
is not fair. What prevents a huge retailer like Wal-Mart, with
unlimited resources, from setting up computers instead of registers so
that customers could purchase goods on-line and avoid a sales tax?
We should not put off a decision on Internet taxation for 6 years.
The current moratorium ends in October of next year. Next year we will
have a new President and a new Congress. That will be a reasonable
period of time for us to deal with this issue. Putting it off for 6
years is unreasonable and unfair.
As an article in today's Washington Post explains, ``The extension is
deceptive legislation that in the short run doesn't do what most people
think, and that in the long run could do real harm. The measure does
not ban sales taxes on e-commerce, transactions over the Internet, but
it sounds as if it does, which suits the sponsors just fine.''
Let us not pass the buck on this decision to a Congress 6 years away.
Let us not pass the bucks, the bucks that businessmen in my district
are now losing to an unfair tax. I am going to support the Delahunt
amendment, and I am going to support the Istook amendment on extending
the moratorium from 5 years to a realistic 2 more years, right into the
next Congress. If that drawback fails, I am voting no on the bill.
Let us deal with this issue soon and not pass the buck. At a time
when the majority is pushing to devolve political power and authority
back to State and local levels, I believe this issue is all the more
important. If we are to expect many of the important governmental
programs to be implemented in this way, States and localities must be
allowed the means to raise that revenue.
In February, the University of Tennessee published a report that
projects how much money States will lose per year by 2003 if businesses
are not required to collect use taxes that are owed by purchasers on
electronic commerce. The report found that the State of Iowa alone
would lose $162 million, and nationwide, States would lose $20 billion.
According to the U.S. Census Bureau, 47.9 percent of State revenues
come from sales taxes. If sales tax is not collected on e-commerce
transactions, State and local governments will have to find other ways
to offset their losses. This could mean raising taxes on income or
cutting back on essential community services, such as education, law
enforcement, public libraries, and transportation.
Once again, my colleagues, Congress needs to stop passing the buck on
this issue. My small businessmen and businesswomen consider this their
number one issue. Vote for Delahunt, vote for Istook. If they fail,
vote ``no'' on the underlying bill.
Mr. HUTCHINSON. Madam Chairman, I move to strike the requisite number
of words.
I am pleased to rise in support of the Internet Nondiscrimination
Act, and I want to thank my colleague from Virginia for his work on
this important issue.
The bill before us provides a moratorium on access taxes on the
Internet for 5 years. I think this is important to allow the
development of this new technology that is truly in its infancy stage.
There is an amendment that has been offered that would limit this
moratorium to 2 years. I believe that is too temporary. It is not long
enough and, therefore, I will oppose that amendment.
The present amendment that is offered makes that permanent, or for 99
years, and I appreciate my colleague from Ohio for raising this point
in the debate and allowing us to have this discussion, but I think
everyone here in Congress knows that a permanent ban is probably not in
the dictionary when it comes to the actions of Congress, because we can
change that down the road. So I think it is somewhat of a meaningless
gesture, however, I believe it is important, because of the other
issues surrounding this moratorium, that we do reengage in this debate
down the road.
One of the issues that are on the periphery of this moratorium is the
States' concern that this somehow impedes their collection of sales
taxes on distance sales. I know that my governor of Arkansas has
written a letter expressing the concern about this moratorium impacting
the collection of sales taxes by the States. When, in fact, as it has
been pointed out, this clearly would not prohibit the States from
trying to develop a means to collect sales taxes on distance sales via
the Internet or catalogue sales.
I am sympathetic to that concern, and I believe it is important that
the Committee on the Judiciary engage in hearings to address this
issue, to continue the debate on that. We need to continue to watch to
see the impact on sales tax collections by our States that impact our
schools and other services provided. But I am also concerned about the
brick-and-mortar businesses, the Main Street businesses, those that
rely upon in-store shopping. They are obviously concerned about the
Internet having a competitive advantage, those engaged in e-commerce.
I think we need to wait and see, but the debate is very important,
and I hope that will continue in hearings in the Committee on the
Judiciary, and I know legislation will be introduced to clarify and
reduce the obstacles that States face in collecting the sales taxes. It
is not an obstacle created by this moratorium, but it is an obstacle
created by the fact that there are no collection methods at present
that the Supreme Court has not found creates an undue burden on
interstate commerce.
{time} 1345
So, therefore, I think we need to look at what we can do to help the
States, make sure that there is not a burden, as well as the problem
with the brick-and-mortar businesses, as I mentioned.
The Internet development clearly should be encouraged. I believe that
if there is a possibility that taxes would be imposed on access to the
Internet that that would be a hinderment. I believe that we should
support this moratorium for that reason.
In my district in Arkansas, where middle America is rural America, I
believe the Internet explosion, the opportunities for e-commerce, the
development of dot-coms represents the future of rural America even. We
see it in the Silicon Valley. We see it on the East Coast. But in rural
America, we have in my district a dot-com which has developed that is
employed. I think we are going to see more of that. And so, I do not
think we want to hamper it right now with the potential for new taxes
on access to that great future that is really in its infancy now.
For that reason, I oppose the amendment to make the moratorium
permanent, I support the underlying bill, and I ask my colleagues to
join in that effort.
Mr. CONYERS. Madam Chairman, I rise to strike the requisite number of
words.
[[Page H2811]]
Madam Chairman, members of the committee, I am, first of all,
saddened that the Chabot amendment was attached to the Delahunt
provision. If only it could have been a more fair parliamentary
universe, we would all be better off in trying to make these decisions.
But having said that, I have no other alternative but to oppose a
permanent extension of a moratorium on Internet access and
discriminatory taxes. Because if we pass a moratorium now, I guarantee
my colleagues that we will never return to the important issue of tax
simplification. We just will not come back, this is it. To try to nail
this on to the Delahunt amendment that narrows to 2 years this
extension I think is very, very unwise.
The problems with the present system are fairly well-known by now.
The complexity is daunting. Six-and-a-half thousand taxing
jurisdictions in the United States, and we want to provide for a
permanent extension of the moratorium without so much as a hearing,
without anyone ever having examined what it is that we would be doing
were we to accept such a provision?
Needless to say, any retailer with a physical nexus to his State is
subject to a myriad of confusing and complex State and local taxes.
Next, the current disparate tax treatment as between brick-and-mortar
and remote sellers has the potential to cause continuing economic
distortion.
In the New York Times, it has been written, an elementary principle
of taxation says that taxes should distort purchasing decisions as
little as possible and it is not the role of the Tax Code to determine
whether a customer shops in stores, on-line, or by mail order.
The gentleman from New York (Mr. Nadler), the ranking member of the
subcommittee, has made that point repeatedly. This is not the job of
Tax Codes to determine where customers shop.
Now, with regard to the impact on State and local governments,
maintenance of the current system carries with it the potential for
significant financial loss. Sales taxes in State after State is the
most important revenue source, far greater than income or property
taxes.
And so, what are we doing here with projections of on-line sales
estimated to exceed $300 billion in only a couple years from now, State
and local governments could lose as much as $20 billion in uncollected
sales tax.
So, my colleagues, please let us vote no on the Chabot amendment, as
well-intended as it may be, and continue our support for the Delahunt
provision.
Mr. CUNNINGHAM. Madam Chairman, I move to strike the requisite number
of words.
Madam Chairman, I strongly support a permanent ban on the tax of the
Net. We need to free the Net. If we look at the Internet, e-commerce
and technology today, it has stimulated the economy. There is an
explosion of the stimulated economy.
In the year 2000, we need not to go back to an analogue system of
government or an analogue system of business. Some of my colleagues
have said that jobs will be threatened in small business. Small
business can join the Net just like anybody else. Many already have.
And the smart ones will in the future join the Net. It will benefit
them and free them from unnecessary taxes.
Because I want to tell my colleagues, Madam Chairman, if we increase
taxes, government at State, at local and at Federal will spend it. I
absolutely guarantee they will. An increase in jobs due to the Internet
actually stimulates growth and has increased tax revenue of existing
taxes. The increase in production of goods produces an increase of
existing taxes.
But my friends on the other side of this issue want a brand new tax.
Think of the bureaucracy alone that it would take to regulate this new
tax. Some of my friends like big bureaucracy. Small business will
actually benefit from taking off and freeing the Net.
I would take a look at the other side of this issue and the spin.
There is a group here in Congress that has never found a tax that they
do not like, never; and any tax relief that we want to give, it is only
for the rich. Whether it is for a marriage penalty, whether it is for
the death tax, whether it is for capital gains, whether it is for
education relief and scholarships, it is only for the rich.
Well, let me tell my colleagues, the same group, my colleagues on the
other side, let me put it in perspective.
In 1993, when the Democrats controlled the White House and the House
and the Senate, they increased the tax on the middle class, they
increased the tax on Social Security and said it was good for the
country. They increased the gas tax. They even had a retroactive tax.
And that was supposedly good for the country because, if we did not
have those taxes, we were going to have to cut education, we were going
to have to do this. But, at the same time, they increased spending.
The Vice President was the deciding vote on all of those tax
increases. And yet, they will spin this that a new tax is always good
for the country. I reject that, Madam Chairman.
In essence, we need to go forward in this country in the year 2000.
There is another group here, Madam Chairman, that further supports my
contention that there are groups that will spin anything to increase or
support a new tax. That is a group called dsausa.org, Democrat
Socialists of America. It is on the Net. This is their Web page.
Under that Democrat Socialists of America, there are 58 Democrats
that belong to the Progressive Caucus that are listed under this. Now,
the Democrat Socialists of America support government control of health
care, government control of education, government control of private
property and, number four, the highest tax possible so that they can
have the highest socialized spending.
My contention is that there are those in this body that would
increase taxes at any cost, prevent tax relief at any cost, and
increase spending in the Government, which has driven us into a debt of
nearly national oblivion.
I rise in strong support of the underlying bill.
Mr. FRANK of Massachusetts. Madam Chairman, I move to strike the
requisite number of words.
Madam Chairman, first let me announce that a prize will be given to
anyone who can connect the dots between the previous speech and the
subject under discussion.
As to the subject under discussion, it is whether or not we should
extend a moratorium for 2 years or 5 years, and it is a moratorium
which already has more than a year to go. That is, there are no
advocates right now of taxing the Internet, per se.
There are many of us, nefarious organizations, one that the previous
speaker did forget to mention, most of the governors of the United
States, whom some people here do not trust because they believe that if
the governors are allowed to continue to administer their sales taxes,
they will spend us into oblivion.
But what we are talking about is not allowing taxes on the Internet
as the Internet. We are talking about the dilemma we face in not being
able to enforce the collection of sales tax which are concededly
legally due and owing through Internet purchases.
Now, there is currently a moratorium. It expires next year. The
gentleman from Massachusetts (Mr. Delahunt), my colleague, has offered
an amendment to extend that for 2 years. The underlying bill would
extend it for 5 years.
There is an amendment, the never-never land amendment, that would
extend it out indefinitely. But I believe the real issue of a serious
note is whether we extend it for 5 years or 2 years. That is the key,
do we extend the moratorium until 2006 or until 2003.
So it is not a case of wanting to tax the Internet. It is not a case
of letting the moratorium fail, even though it has no expiration date
until next year. The question is whether it is a 3-year extension or a
5-year extension of a moratorium; in other words, a moratorium or a
less-atorium. But it is still going to be a veto on any taxes.
The question, then, is why are some of us against a 5-year extension.
The answer is this: States today depend in many cases heavily on the
sales tax. There is a reason for allowing the States to collect the
sales taxes that are already owing, both to finance important State
activity, and also so that retailers who operate in cities and
elsewhere are not at a competitive disadvantage because the purchaser
has to
[[Page H2812]]
pay a tax when, de facto, a purchaser over the Internet may not have
to.
Collecting sales taxes on Internet purchases is conceptually easy but
has some specifics of that to be worked out.
What we need is the participation of the people who do the retailing
over the Internet and the local and State governments and others so
that we can work out a sensible regime whereby sales taxes that are
legally owing can be collected once, not in a duplicative fashion, so
that we do not put the Internet at any disadvantage but neither do we
give them a competitive advantage over those physical retailers located
in communities and so we do not detract from the revenues that States
need to carry out their responsibilities.
The problem many of us feel is this: If we further extend this
moratorium for 5 years and, a fortiori, if we do it forever, as the
pending amendment proposes, we reduce substantially any incentive for
those who have the expertise about e-retailing to participate in the
negotiations we need to work out a fair system.
The retailers over the Internet will say, well, wait a minute. We are
worried we may have multiple sales tax claims. People may claim we owe
in this State and owe in that State. How do we find out the best way to
enforce it?
By some conversations and negotiations.
The effect of passing indefinite moratoria, first until 2001 and then
to 2006 and then maybe ultimately forever, will be to undermine the
possibility of discussions so that we can come up with a regime not
where we tax the Internet but where we fairly allow State sales taxes
to be collected irrespective of where the purchase is made.
That is the goal. We do not want economic decisions to be made based
on tax avoidance or tax advantage. We want them to be made based on the
real economic activity. And, therefore, the legal system ought to be
neutral as between physical stores in particular locations and
retailers over the Internet.
{time} 1400
In fact, today they are not. In fact, there is an advantage in buying
over the Internet because of the difficulty of collecting the sales
taxes and the uncertainties. What we are trying to achieve is a regime
where there will be no such disadvantage, where the States will not be
losing revenues. People have said, ``Well, not that much is sold over
the Internet now.'' But the goal, of course, is greatly to increase
that. That is a perfectly legitimate goal. That ought to be a matter of
consumer choice. Whether to do it through the Internet or do it through
a physical location, or go back and forth. But if we allow a tax
disadvantage, then we will not reach that ideal.
Mr. COX. Madam Chairman, I move to strike the requisite number of
words.
I rise in support of the amendment that is pending, the Chabot
amendment.
Madam Chairman, the preceding speaker began by asking whether anyone
could connect the dots between the preceding speakers and the subject
under discussion, then told us that the subject under discussion was
whether we should have a 2-year extension or a 5-year extension of the
existing moratorium. Whereas, in fact, the subject under discussion is
the Chabot amendment, and the Chabot amendment, as the author made very
plain when he explained it, would make the existing moratorium on
discriminatory and multiple Internet taxes permanent. It is not a
question of 2 years or 5 years. The subject under debate, the current
amendment, and every Member should focus on this, is whether or not to
make the existing moratorium permanent. So that is mistake number one
that I wanted to correct. It is, we are not debating 2003 or 2006, we
are debating permanent or not.
The second thing that the gentleman said is that we should oppose
either a 5-year extension or impliedly a permanent extension because
States depend on sales taxes. But it is very, very important to repeat,
again, as we have so many times in this debate, that neither the Chabot
amendment, which is now under consideration, nor the underlying bill
which it amends, nor the existing Cox-Wyden moratorium on Internet
taxes, multiple and discriminatory taxes, even mentions sales taxes.
Sales taxes are not covered by this amendment or by the legislation.
The third thing that the speaker mentioned is that we need to give e-
tailers, that is, small businesses and businesses of all kinds that do
business on the Internet, an incentive to negotiate on the sales tax
question, which I think everyone in the Chamber appreciates is an
important question. But doing something unfair, injurious to them and
to the economy as a means of getting their attention and supposedly
giving them an incentive to negotiate is hardly a legitimate means for
this government to proceed. It is like offering to help you by driving
a nail through your hand and then saying, I will pull it out.
The ban on multiple taxes and on discriminatory taxes is one that
ought to be made permanent because it is the right thing to do. The
governors agreed with me when I originally wrote the legislation that
we should not have taxes on Internet access and indeed they support a
permanent ban on taxes on Internet access. Governor Leavitt, as the
head of the National Governors Association, has long supported a
permanent ban, not just one for 2 years or 5 years, or what have you,
on Internet access taxes, because he, like so many of us is, worried
about the digital divide or does not wish one further to develop.
If you are interested in getting broader access to the new economy
through the Internet to more Americans, we would like to keep the
freight charge on getting on the Internet in the first place as low as
possible. And certainly we should not have people piling on with new
taxes.
Lastly, let me add to what has already been said. That not a single
State in the country has enacted legislation to tax the Internet. Not
one. All of these attempts to tax the Internet are illegitimate acts of
bureaucrats, tax-collecting bureaucrats in the States who are
reinterpreting the tax laws of those jurisdictions to apply to the
Internet which Al Gore had not even invented yet when these laws were
passed, but not a single State out of all 50 has passed an Internet tax
in this country. That is to say, the legislature never said, ``Here's
the Internet, let's tax it.'' Instead, they have utility taxes or they
have telecommunications taxes or line charges or various things that
have been laying around that were designed for something else, and the
bureaucrats, the tax administrators, have decided that they were going
to reinterpret them cleverly to apply to the Internet, even though the
legislature of the State never made any such determination.
That is why Democratic Senator Ron Wyden and Republican Congressman
Chris Cox first got together with the Internet Tax Freedom Act to say,
no, there are plenty enough taxes on the books already. We do not want
new taxes, either ones cooked up in the imaginations of tax bureaucrats
or by legislatures that will single out the Internet for
discrimination, for discriminatory treatment.
There are only three kinds of taxes that are covered in this
moratorium, and I will conclude by saying this, Madam Chairman. The
first is a tax on Internet access. The second is a discriminatory tax,
that singles out the Internet and taxes it when a main street business
would not be taxed in the same way, or a street corner would not be
taxed in the same way. The last is a multiple tax where two States
would tax the same commerce. Since none of us is in favor of those
things, we should be in favor of the Chabot amendment. I urge all my
colleagues to vote for it.
Ms. JACKSON-LEE of Texas. Madam Chairman, I move to strike the
requisite number of words.
(Ms. JACKSON-LEE of Texas asked and was given permission to revise
and extend her remarks.)
Ms. JACKSON-LEE of Texas. Madam Chairman, might I say to my
colleagues, it is interesting. We are actually having the debate that I
believe would be more appropriate in each of our respective committees.
I know that the Committee on Commerce is addressing this question. I
know the National Governors Association has proposals that they would
like us to consider. The Committee on the Judiciary is going to have
hearings next week, or the week after next. Let me say to my
[[Page H2813]]
colleagues, if we are concerned about the 10th amendment, here is what
we can do today.
Frankly, we could do nothing, which is not to have this bill on the
floor of the House. But we can respect the fact that we do not have all
the answers and we could, as I had intended to do, to offer an
amendment that ensures that the grandfathered States remain
grandfathered, the 10 States that are the ones that have already
addressed this question in the best way that they feel appropriate for
garnering revenue in their respective States.
Might I, for the record, indicate that those States include Texas,
Connecticut, Montana, New Mexico, Ohio, South Carolina, Tennessee,
Washington and Wisconsin. I do not know what other States may have
pending legislation. We have an expiration date of 2001. We could
continue that expiration date with the grandfathered-in states, we
could continue to have hearings and we could determine the most
appropriate manner to address this question. It is not often that
Members of Congress want to cite editorials, but I think it is
important to note that even The Washington Post, which I think is known
for its progressiveness and certainly would be supportive of Internet
companies and access to the Internet, recognizes that the States have
the ability and the rights to make some of these decisions.
For example, they cite one form that could be utilized, the answer is
for the States to make their tax codes more uniform, not the rates but
the definitions, what constitutes food, for example, which is often
exempt, and that Congress should authorize an interstate compact. That
is just one suggestion. But we are here with no suggestions and we have
the Chabot amendment that wants to make it a permanent moratorium. They
want to bankrupt cities and counties and States permanently. Texas is
poised to lose $1 billion. Our State comptroller says that we are
getting a $50 million revenue. Does everybody want to put all their
eggs in the lottery basket? Is that what we are going to send States
to, is that everybody has to depend on the big day in the lottery and
see if they can get any small dollars out of that? I think that what we
are doing is a great disservice. The amendment that I had intended to
offer clearly spoke to the idea that States have found their way into
structuring a tax system that responds to their needs.
In the instance of Texas, we even gave relief to the first $25 access
fee. I think that clearly shows that States have an intellect about
this access fee and are not intending to gouge e-commerce. They want it
to thrive. They want it to grow. I do not know how we could imagine
that we could have a permanent moratorium without reasonable hearings
and listening to the National Governors Association and answering the
question.
As I indicated, Madam Chairman, I had intended to offer this
amendment because, as I gathered with my constituents, the concern was
to ensure that we do not bankrupt States, period. I am encouraged by
the debate on the Delahunt amendment, and I certainly do not want the
Chabot perfecting amendment, permanent moratorium to pass, for I think
we would be characterized as clearly doing business in the dark. We
have no information that would warrant a permanent moratorium, a
permanent bankruptcy of local jurisdictions or State jurisdictions.
I would therefore like to ask the gentleman from Massachusetts (Mr.
Delahunt), in light of my concern, whether his underlying amendment
speaks to the issue, one, of the question of the grandfathered States,
are they still included as the present legislation has them in the main
bill?
Mr. DELAHUNT. Madam Chairman, will the gentleman yield?
Ms. JACKSON-LEE of Texas. I yield to the gentleman from
Massachusetts.
Mr. DELAHUNT. The Delahunt-Thune amendment just simply extends the
current existing status quo for an additional 2 years upon the date of
expiration of the current moratorium. That date is October 21, 2001.
Ms. JACKSON-LEE of Texas. Which then, as it extends, it would include
already present law which is the existing grandfathered states?
Mr. DELAHUNT. It would include everything that is currently embraced
by the existing moratorium.
Ms. JACKSON-LEE of Texas. I thank the gentleman.
Let me just say that in concluding, the expiration date is 2001. This
gives us an extra 2 years beyond that, an opportunity for detailed work
on this issue. I oppose the Chabot amendment. Vote for the Delahunt
amendment and get us back to where we need to be.
Madam Chairman, I rise to raise my amendment seeking to maintain the
grandfather clause permitting states that already impose Internet
access taxes, to continue to do so; which I intend not to offer in
order to oppose the Chabot amendment which calls for a permanent
moratorium and instead support the Delahunt amendment which extends
current law with the grandfathered states remaining for two years.
This bill seeks to change the current five-year moratorium
prohibiting states or political subdivisions from imposing taxes on
transactions conducted over the Internet. I do not support extending
the moratorium through 2006 because it bars states from collecting much
needed tax revenue.
Under current law, there is a limited moratorium on state and local
Internet access taxes as well as multiple and discriminatory taxes
imposed on Internet transactions, subject to a grandfather clause
permitting states that already tax Internet access to continue such
practice.
My amendment would restore the grandfathering clause of present state
practices that permit the taxation of Internet access charges. The
current moratorium is scheduled to expire on October 21, 2001, and was
merely designed as an interim device to allow a commission to study the
problem of Internet taxation.
There is simply no reason to change the law at this time. For this
reason, I was concerned that this particular bill was rushed for
consideration at a full judiciary mark-up.
My amendment will allow states to maintain the ability to generate
vital tax revenues that fund essential state programs for the public.
Many states across our nation already rely on these crucial revenue
streams.
The ability of states to decide and implement their own tax policies
is their right. The Congress should not enact this legislation without
voting for my amendment which would allow the states of Connecticut,
Montana, New Mexico, North Dakota, Ohio, South Dakota, Tennessee,
Texas, Washington, and Wisconsin to continue the funding of vital
services for their states.
Madam Chairman, we should not support a bill that champions the
growth of an industry on the backs of hard working Americans who often
do not directly benefit from the technological revolution. We must
first address the digital divide in our country before we enact another
measure of corporate welfare.
Mr. STEARNS. Madam Chairman, I move to strike the requisite number of
words.
Madam Chairman, I rise in support of the Chabot amendment. I would
say to those who are against this, that there are other ways to tax
these products once they get into the State of jurisdiction, either
through a tax on UPS or a tax on Federal Express, there are lots of
other ways to tax it. I submit also the way the tax structure is from
State to State is so complicated that you cannot even understand how to
even tax it.
So I think the moratorium, until we figure it out, is the way to go.
I had an amendment, Madam Chairman, to extend the 19-member advisory
commission on electronic commerce. That is the proper way to do it.
This commission, as we know, had the formidable task of studying the
impact of sales and use tax collection on Internet sales. They made
some recommendations. I am disappointed, of course, that the commission
failed to gain the two-thirds majority necessary for a formal
recommendation to Congress. As a result of the commission's impasse and
procedural wrangling, several of the most important questions the
commission was given to solve, they could not answer. For example,
whether Congress should mandate simplification of sales and use tax
administration and whether the existing nexus standards for interstate
commerce should be overturned still have not been solved. That is why I
thought the amendment was appropriate for this debate this afternoon
which was not in order, the parliamentarian said it was not in order,
an amendment to offer to revise and reconvene the 19-member advisory
commission on electronic commerce in order to finish the task that they
were assigned originally.
The underlying bill, the Chabot bill, which is to extend the
moratorium forever and the Cox bill, which is to go for
[[Page H2814]]
5 years, I support in both cases. Without this 19-member commission
reconvened, I do not think they can really start to understand some of
the major questions of the Internet, mainly, the simplification of
sales and use tax, and how we are going to even tax the Internet. So
until we do that, we should have a moratorium on this. That is why I am
very supportive of this Chabot amendment.
This goes to a larger question. If, in fact, we cannot determine to
simplify taxes through the Internet and understand it, maybe that goes
to the overall question of reforming the tax code in America, which
would be either a flat tax or a sales tax. I submit a sales tax is
based upon taxing Americans on their consumption rather than how hard
they work. That would be done on a State-by-State basis, and they would
make that decision. I submit, also, that a moratorium on the tax on the
Internet does not preclude the States from taxing within their State on
products that are brought in through either location or through Federal
Express or UPS and things of that sort. I think the actual way to
handle this on a larger measure is to reestablish the 19-member
advisory commission on electronic commerce, let them finish the task of
determining how to simplify taxes and whether there should be taxes on
the Internet, finish their job and present their recommendations to
Congress, and hopefully the whole landscape of electronic commerce and
the Internet will become more obvious, more mainstream and technology
will catch up, and the answers that we are trying to grapple with this
afternoon, we will be able to solve better.
In the meantime, I think we should support the Chabot amendment. I
urge adoption of it. Madam Chairman, I will draw up as a separate bill
the idea of extending the 19-member commission to study the
simplification of taxes on the Internet. I urge all my colleagues to
support my bill.
{time} 1415
Mr. KASICH. Madam Chairman, I move to strike the requisite number of
words.
Madam Chairman, I find myself very frustrated with this discussion,
because it is my sense that in a lot of regard, we have missed the
point of the debate about the Internet. When I listen to some of my
colleagues talk about the need to be able to collect all these
revenues, I almost think of the Pharisees in the Bible who were so hung
up on the micro that they, in fact, missed the macro issues at hand.
The Internet is the engine that is helping us to generate, frankly,
unprecedented economic growth, certainly unprecedented economic growth
over the period of the last several decades. The Internet has driven
the growth of jobs, a million people are now employed in a sector that
did not even exist 5 years ago. It is not just driving jobs in the
sector affecting the Internet, but if we just look at that one, there
are 1 million people who did not have jobs in this area just a few
years ago. It is driving the growth of wealth. What we see happening in
America for the first time in a long time is that this growth in
productivity and this growth in wealth is not just affecting people at
the top, but it is affecting all Americans. Everybody is better off
today as a result of the growth of this economy and the growth of
productivity.
What this growth in productivity has done is to lower inflation. If
one is an American and one is trying to figure out how to think about
the economy, look at productivity. Productivity is the ability of a
worker to produce more in the same amount of time, squeezing out
inflation, which gives us real economic growth and a growth in wages.
That is what has been happening in America. The single largest
contributor to the growth in productivity, the growth in wealth, and
the growth in wages for Americans at all levels has been information
technology, the Internet. Why would we try to tax something, why would
we try to abuse something, why would we try to limit something that is
generating for us unprecedented growth, unprecedented wealth,
unprecedented opportunity, and unprecedented individual power?
When we look at the Internet and what it offers in the area of health
care and education, the benefits can be unlimited. Just yesterday, as a
result of the computer and its ability to, in an exponential factor, be
able to calculate, just yesterday it was announced that we have been
able to isolate the gene that affects Down's syndrome. How many mothers
and fathers in this country have wished that we had isolated the gene
for Down's syndrome decades ago?
There are a lot of young staffers that watch this debate on the House
floor, and this Internet is about you, it is about the future, it is
about your power and your children's power.
People say we do not collect enough revenue. We are going to lose
revenue growth. Madam Chairman, 46 States are running surpluses, they
totaled $7.5 billion from 1992 to 1998, State revenues grew by 45
percent, that is more than the growth of inflation and population
combined. The States are awash in revenue. Government at all levels is
growing too big, not just in Washington, but at the State level and the
local level, and it should be the mission of government in the 21st
century to break the hold of government, retrench government and get
government to not do what we can do for ourselves, and only to perform
those functions that we cannot do for ourselves. If we tax something,
we get less of it. That is precisely what we would do if we began to
tax an infant industry that offers us limited potential.
Frankly, where we need to go is to let this industry grow unabated,
to not have access fees and to tax the sales on the Internet. Let it
grow. Let it realize its complete potential, because its potential
affects each and every one of us in a very positive way. At some point,
it will be necessary to look at a tax system in the 21st century that
will be consistent with the growth of the new economy. To apply a 20th
or a 19th century tax system to this new economy is like putting the
wheels from a Volkswagen on an Indy racing car. We want that car to go
as fast as it can, and our tax system in America ought to be one that
is consistent with economic growth, which frankly leads us in the
direction of consumption taxes, taxes that reward savings and
investment, that is consistent with the new growth and new economy and
the growth and the potential that we have.
Madam Chairman, I say to my colleagues, we should not have access
fees, all sorts of taxes on this Internet. Let us extend the gentleman
from Ohio's amendment. Let us hold up on taxing the Internet and let us
give technology and individuals a chance.
Mr. ISTOOK. Madam Chairman, I have an amendment at the desk on behalf
of myself and the gentleman from Maryland (Mr. Cardin).
Mr. GOODLATTE. Madam Chairman, I reserve a point of order.
The CHAIRMAN pro tempore (Mrs. Biggert). The gentleman from Virginia
(Mr. Goodlatte) reserves a point of order.
There is already an amendment pending. The Chairman of the Committee
of the Whole has to first dispose of the amendments pending.
Does the gentleman wish to speak on this amendment?
Mr. ISTOOK. Madam Chairman, I wish to speak on my amendment and to
offer the amendment for consideration.
The CHAIRMAN pro tempore. Is there objection to the request of the
gentleman from Oklahoma to offer an amendment notwithstanding the
pendency of another amendment?
Mr. GOODLATTE. Madam Chairman, I object to the consideration of
another amendment when there are two amendments pending on the floor.
The CHAIRMAN pro tempore. Objection is heard.
Does the gentleman from Oklahoma (Mr. Istook) wish to speak on this
amendment?
Mr. ISTOOK. Madam Speaker, I wish to offer my amendment which is at
the desk. If there are no further speakers, I believe it is proper to
proceed.
Mr. GOODLATTE. Madam Chairman, I would insist upon my point of order.
The CHAIRMAN pro tempore. The Chair would first put the question on
the pending amendment. Another amendment is not in order at this point.
Are there any other speakers on the pending amendment?
Mr. LEVIN. Madam Chairman, there is a poignant scene in Homer's epic,
The Odyssey, that bears mention as we consider the legislation before
the House today. On his journey
[[Page H2815]]
home, Odysseus' ship must pass by the island of the Sirens, whose
beguiling song has the power to hold men spellbound to such an extent
that the sea around their island is heaped with wrecks of ships that
have fallen under their spell. Forewarned of the danger ahead, Odysseus
stops up the ears of his crew with wax so they cannot hear the Sirens'
song, and has himself bound to the ship's mast, and thus safely makes
the passage.
I was reminded of this ancient narrative when I read the bill before
us today. The legislation we are considering extends the Internet tax
moratorium until October 21, 2006. It seeks to bind our course when the
only certainty is that we haven't the faintest idea of what lies ahead.
E-commerce did not exist six years ago. Who know what it will look like
six years from now? Some projections show that on-line sales could
exceed $300 billion a year by 2002. We have not adequately explored the
ramifications of this legislation or considered the concerns of the
vast majority of the nation's governors who seek a mechanism to level
the playing field between the bricks-and-mortar shops of Main Street
and the clicks-and-mortar shops of cyberspace. But the authors of this
legislation have stopped their ears with wax. There were not even any
hearings on this bill.
We need to chart a reasonable course. There is not yet a consensus on
what course we should set on the issues of Internet taxation and state
tax simplification. Clearly there is a need for an extension of the
moratorium, and I actively support an extension of two years. But to
stifle action for six years regardless of what might be the winds of
change is not a prudent navigation of public policy. A two-year
extension of the moratorium would provide us additional and hopefully
sufficient time to resolve outstanding issues of considerable
complexity. We can always revisit this issue and grant another
extension if conditions warrant it. I therefore urge my colleagues to
support the Delahunt amendment, which extends the current moratorium
until October 21, 2003. We shouldn't legislate without a compass on an
issue of this importance.
The CHAIRMAN pro tempore. Are there any speakers on this amendment?
The Chair will put the question on the pending amendment.
The question is on the amendment offered by the gentleman from Ohio
(Mr. Chabot) to the amendment offered by the gentleman from
Massachusetts (Mr. Delahunt).
The question was taken; and the Chairman pro tempore announced that
the noes appeared to have it.
Mr. CHABOT. Madam Chairman, I demand a recorded vote, and pending
that, I make a point of order that a quorum is not present.
The CHAIRMAN pro tempore. Pursuant to the House Resolution 496,
further proceedings on the amendment offered by the gentleman from Ohio
(Mr. Chabot) and on the pending first degree amendment will be
postponed.
The point of no quorum is considered withdrawn.
Amendment Offered by Mr. Istook
Mr. ISTOOK. Madam Chairman, I offer an amendment.
The Clerk read as follows:
Amendment offered by Mr. Istook:
After section 3 insert the following:
SEC. 4. STREAMLINED NON-MULTIPLE AND NON-DISCRIMINATORY TAX
SYSTEMS.
It is the Sense of Congress that a State tax relating to
electronic commerce, to avoid being multiple or
discriminatory, should include the following:
(1) a centralized, one-step, multi-state registration
system for sellers;
(2) uniform definitions for goods or services that might be
included in the tax base;
(3) uniform and simple rules for attributing transactions
to particular taxing jurisdictions;
(4) uniform rules for the designation and identification of
purchasers exempt from the Non-multiple and Non-
discriminatory tax system, including a database of all exempt
entities and a rule ensuring that reliance on such database
shall immunize sellers from liability;
(5) uniform procedures for the certification of software
that sellers rely on to determine Non-multiple and Non-
discriminatory taxes and taxability;
(6) uniform bad debt rules;
(7) uniform tax returns and remittance forms;
(8) consistent electronic filing and remittance methods;
(9) state administration of all Non-multiple and Non-
discriminatory taxes;
(10) uniform audit procedures;
(11) reasonable compensation for tax collection that
reflects the complexity of an individual state's tax
structure, including the structure of its local taxes;
(12) exemption from use tax collection requirements for
remote sellers falling below a specified de minimis
threshold;
(13) appropriate protections for consumer privacy; and
(14) such other features that the member states deem
warranted to remote simplicity, uniformity, neutrality,
efficiency, and fairness.
Mr. ISTOOK (during the reading). Madam Chairman, I ask unanimous
consent that the amendment be considered as read and printed in the
Record.
The CHAIRMAN pro tempore. Is there objection to the request of the
gentleman from Oklahoma?
There was no objection.
The CHAIRMAN pro tempore. Considering the remaining time, the
gentleman from Oklahoma (Mr. Istook) is recognized for 3 minutes in
support of his amendment, and the Chair will recognize a Member opposed
for 3 minutes.
Mr. GOODLATTE. Madam Chairman, I reserve a point of order on the
amendment.
The CHAIRMAN pro tempore. The gentleman from Virginia (Mr. Goodlatte)
reserves a point of order.
Parliamentary Inquiry
Mr. FRANK of Massachusetts. Madam Chairman, parliamentary inquiry.
The CHAIRMAN pro tempore. The gentleman will state it.
Mr. FRANK of Massachusetts. Is there a copy of this available? We do
not have a copy over here.
Mr. ISTOOK. Madam Chair, I will make sure an additional copy is sent
to the gentleman immediately.
Mr. FRANK of Massachusetts. The gentleman could e-mail it to me.
Mr. ISTOOK. Madam Chair, I would if I had a terminal right here.
The CHAIRMAN pro tempore. The gentleman from Oklahoma (Mr. Istook) is
recognized for 3 minutes.
Mr. ISTOOK. Madam Chairman, this is the amendment that has the
support of the governors who have serious concerns about this
legislation, and also of the retail merchants who seek nothing but
fairness in this. We should not discriminate against those who do
business via the Internet, nor should we discriminate against those who
do business outside of the Internet.
Now, as has been brought forward, the big problem with the underlying
legislation is that it tries to take an easy thing, saying we do not
discriminate against the Internet and ignore the difficult task of
resolving the difficulties of equal treatment, a level playing field.
As has been proposed by the governors, and proposed by retail
merchants, and we have letters of endorsement from them, we need
something that they know is a road map. This is how we do it uniformly
and fairly. As the legislation sense of Congress specifies, it would be
through a centralized, multi-State registration system for sellers,
uniform definitions for goods and services that are subjected to a
potential tax; uniform and simple rules for attributing transactions to
one jurisdiction and one jurisdiction only, so there would be no
multiple taxation and no discriminatory taxation; similarly, uniformity
which the States frequently do through the Commission on uniform laws.
Madam Chairman, this is simply Congress trying to give a road map.
That is what people have been crying out for. We want to do things in a
fair, nondiscriminatory fashion. Just give us some assistance in doing
so instead of saying no. That is what this is. It is a sense of
Congress. It is not binding, but it certainly gives the States and
retailers guidance. I am pleased that it has support of the E-Fairness
Coalition, the National Retail Merchants Federation, the International
Mass Retail Association, governors and others with an issue at stake in
this. After all, Madam Chairman, the underlying registration, who does
it restrict? It restricts the governors, the State legislators, the
mayors, the city council members, the county commissioners. It
basically says, we are not going to let you make decisions on your own
taxes in your own State. That violates the 10th amendment to the
Constitution, reserving the rights of the States which do not properly
belong to the Federal Government.
This amendment would go a great deal forward in fixing the underlying
problems that this legislation attempts to ignore. Madam Chairman, I
think that it is hard to imagine how anybody would oppose this. We have
certainly worked diligently with the Parliamentarian to make sure that
it is in order and within the House rules of germaneness and all of the
other rules, and I certainly believe that it is time that we move ahead
with its adoption.
Mr. NADLER. Madam Chairman, I rise to strike the last word.
[[Page H2816]]
The CHAIRMAN pro tempore. Is the gentleman in opposition?
Mr. NADLER. No, Madam Chairman, I am in support.
The CHAIRMAN pro tempore. Is there a Member in opposition?
Mr. GOODLATTE. Madam Chairman, I rise in opposition.
Parliamentary Inquiry
Mr. NADLER. Madam Chairman, parliamentary inquiry.
The CHAIRMAN pro tempore. The gentleman will state it.
Mr. NADLER. When we are under the 5-minute rule, what rule says a
Member has to be in support or opposition to be recognized first?
The CHAIRMAN pro tempore. The Chair stated prior to debate on the
amendment that the gentleman would speak in support of his amendment
for 3 minutes and then the opposition would have 3 minutes.
Mr. NADLER. Madam Chair, I do not recall any such unanimous consent
request.
The CHAIRMAN pro tempore. The Chair exercised her discretion to
double the time because of the shortness of time remaining under the
rule. That is the ruling of the Chair and there is precedent for it.
Mr. NADLER. Madam Chairman, in light of the fact that the other side
of the aisle refused a unanimous consent request to have a reasonable
limit on debate on the last amendment so that we can have proper time
here, and there is no unanimous consent request, I believe that the
Chair is not in order in using discretion to impose a time limit like
that.
The CHAIRMAN pro tempore. It has been the long-standing practice of
the Chair in its discretion to divide the time equally when there is a
time limit placed on the bill.
Mr. NADLER. Could the Chair specify the rule that permits that,
please, in the absence of unanimous consent.
The CHAIRMAN pro tempore. It is the practice of the Chair under
modern recorded precedent.
Parliamentary Inquiry
Mr. FRANK of Massachusetts. Parliamentary inquiry, Madam Chair.
The CHAIRMAN pro tempore. The gentleman will state it.
Mr. FRANK of Massachusetts. Officially, what time is it now?
The CHAIRMAN pro tempore. There is 1 minute remaining.
Mr. FRANK of Massachusetts. So 1 minute remains to debate, and then
the vote. I thank the Chairperson.
{time} 1430
The CHAIRMAN pro tempore (Mrs. Biggert). The gentleman from Virginia
(Mr. Goodlatte) is recognized in opposition for the remainder of the
time.
Mr. GOODLATTE. Madam Chairman, I rise in strong opposition to this
amendment.
Madam Chairman, this is extraneous to the purpose of this bill. This
bill is not about sales taxes on the Internet. The gentleman has
attempted to craft this in such a way that it does not cover sales
taxes, but this is an issue that we have not gotten into.
We have announced that we are going to hold hearings on this. We
would love to have the gentleman's participation in the process, but
this amendment is not germane to the legislation at hand.
I strongly urge my colleagues not to adopt an amendment which has not
been examined or properly debated.
Madam Chairman, I yield back the balance of my time.
Mr. NADLER. Madam Chairman.
The CHAIRMAN pro tempore. The gentleman from New York.
Mr. NADLER. Madam Chairman, the whole point of this debate is that
when the Internet Moratorium Act was passed 2\1/2\ years ago, the
commission was charged with recommending a fair and equitable and
nonburdensome way of giving equal taxation for the Internet and non-
Internet, insofar as State sales taxes are concerned. This amendment is
essential so when we are extending the Internet, whether for 2 years or
5 years, or whether we are extending the moratorium, whether for 2
years or 5 years or permanently, we at least have some basis for saying
we are going to look also at the entire question which is intimately
associated with this question.
(Mr. CARDIN asked and was given permission to revise and extend his
remarks.)
Mr. CARDIN. Madam Chairman, yesterday I received a fax in my office
from an organization supporting this bill. I expect each member of the
House received the same fax.
Across the top of the page, in big, bold letters, the fax read, ``NO
MORE TAXES! VOTE ``YES'' ON H.R. 3709.''
The text of the message says that the bill is needed because it will
``allow Americans to continue to make purchases without overreaching
taxes.'' The problem with the message is that it adds to the confusion
and misinformation that surrounds this issue.
Anyone who reads the message would reasonably conclude that the
purchases of goods over the Internet are currently exempt from State
sales and use taxes, and that the moratorium will prevent the
imposition of any taxes on these transactions.
The problem is that all but five states already have taxes on the
books that legally apply to purchases made over the Internet. For
reasons arising under the 1992 Supreme Court decision in the case Quill
v. North Dakota, those taxes are not usually paid or collected. The
most important issue considered--but not resolved--by the Advisory
Commission on Electronic Commerce, was the question of how to continue
the tremendous growth of the Internet as an economic force while
assuring a level playing field between different forms of retailers.
With more than 6,500 state and local sales and use tax regimes across
the country, there is no question that simplification and uniformity
are desperately needed. The massive complexity and inefficiency of the
current system imposes an unreasonable burden on the retailers who are
required, because they have ``physical nexus'' in jurisdictions across
the country. At the same time, it presents an absurd challenge to on-
line or mail order retailers who compete with ``brick and mortar''
retailers.
There is a growing consensus that the states must develop a
simplified tax system, along the lines of the Uniform Commercial Code,
that will make compliance feasible. I had the benefit of hearing a full
discussion of these issues at a meeting two weeks ago with business
leaders, state tax officials, and the chairs of the tax-writing
committees in Maryland's State Legislature. Coming out of that meeting,
I am convinced that it is in the interest of fairness to all retailers,
as well as of the state and local governments which depend on the
revenues generated by sales taxes for education and law enforcement,
for us to resolve this problem.
The amendment that I have offered with the gentleman from Oklahoma,
Mr. Istook, expresses the sense of Congress that the States should
develop a streamlined, non-multiple and non-discriminatory tax system.
This amendment is a needed expression of our understanding of the need
both to protect the crucial revenue sources of the states, as well as
to move toward a level playing field between all retailers, regardless
of whether they are on-line or in the neighborhood.
We had hoped to include in the amendment language expressing the
sense of the Congress that once the states develop such a non-multiple,
non-discriminatory tax system, the bar against fair application of the
sales taxes presented by the Quill decision would be removed. The
language we had hoped to propose would have expressed Congress's
finding ``that if states adopt the streamlined system . . ., such a
system does not place an undue burden on interstate commerce or burden
the growth of electronic commerce and related technologies in any
material way.'' Unfortunately, to comply with the germaneness
requirements of the House rules, we were forced to drop that language.
I urge support for the amendment as a necessary step in the
continuing effort to adjust the existing tax system to reflect the new
reality of the Internet economy.
The CHAIRMAN pro tempore. The time for consideration of this bill
under the 5-minute rule as established by House Resolution 496 has
expired.
The CHAIRMAN pro tempore. The Chair will now put the question on the
pending amendment.
The question is on the amendment offered by the gentleman from
Oklahoma (Mr. Istook).
The question was taken; and the Chairman pro tempore announced that
the ayes appear to have it.
Mr. CHABOT. Madam Chairman, I demand a recorded vote.
The CHAIRMAN pro tempore. Pursuant to House Resolution 496, further
proceedings on the amendment offered by the gentleman from Oklahoma
(Mr. Istook) will be postponed.
Sequential Votes Postponed in the Committee of the Whole
The CHAIRMAN pro tempore. Pursuant to House Resolution 496,
proceedings will now resume on those amendments on which further
proceedings were postponed in the following order:
The second degree amendment offered by Mr. Chabot of Ohio;
[[Page H2817]]
First degree amendment offered by Mr. Delahunt of Massachusetts;
Amendment offered by Mr. Istook of Oklahoma.
The Chair will reduce to 5 minutes the time for any electronic vote
after the first vote in this series.
Amendment Offered By Mr. Chabot to the Amendment offered by Mr.
Delahunt
The CHAIRMAN pro tempore. The pending business is the demand for a
recorded vote on the amendment offered by the gentleman from Ohio (Mr.
Chabot) to the amendment offered by the gentleman from Massachusetts
(Mr. Delahunt) on which further proceedings were postponed and on which
the noes prevailed by voice vote.
The Clerk will designate the amendment to the amendment.
The Clerk designated the amendment to the amendment.
Recorded Vote
The CHAIRMAN pro tempore. A recorded vote has been demanded.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 90,
noes 336, not voting 8, as follows:
[Roll No. 155]
AYES--90
Aderholt
Barr
Barrett (NE)
Bartlett
Bilbray
Boehner
Bono
Burton
Cannon
Chabot
Chambliss
Chenoweth-Hage
Coburn
Collins
Combest
Cook
Cox
Crane
Cunningham
Davis (VA)
DeLay
DeMint
Diaz-Balart
Dickey
Doolittle
Fletcher
Forbes
Fossella
Franks (NJ)
Goode
Goodlatte
Goodling
Graham
Hastings (WA)
Hayworth
Hefley
Herger
Hill (MT)
Hilleary
Horn
Kasich
Kingston
Kuykendall
Linder
Martinez
McCollum
McInnis
McKinney
Metcalf
Mica
Miller (FL)
Miller, Gary
Nethercutt
Packard
Pease
Peterson (PA)
Pitts
Pombo
Radanovich
Rogan
Rohrabacher
Ros-Lehtinen
Royce
Ryan (WI)
Salmon
Scarborough
Schaffer
Sensenbrenner
Shadegg
Shays
Sherwood
Simpson
Skeen
Smith (MI)
Smith (NJ)
Smith (TX)
Souder
Stabenow
Stearns
Sununu
Tancredo
Tauzin
Taylor (NC)
Terry
Toomey
Upton
Walden
Weldon (FL)
Weller
Wolf
NOES--336
Abercrombie
Ackerman
Allen
Andrews
Archer
Armey
Baca
Bachus
Baird
Baker
Baldacci
Baldwin
Ballenger
Barcia
Barrett (WI)
Barton
Bass
Bateman
Becerra
Bentsen
Bereuter
Berkley
Berman
Berry
Biggert
Bilirakis
Bishop
Blagojevich
Bliley
Blumenauer
Blunt
Boehlert
Bonilla
Bonior
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brady (TX)
Brown (FL)
Brown (OH)
Bryant
Burr
Buyer
Callahan
Calvert
Camp
Canady
Capps
Capuano
Cardin
Carson
Castle
Clay
Clayton
Clement
Clyburn
Coble
Condit
Conyers
Cooksey
Costello
Coyne
Cramer
Crowley
Cubin
Cummings
Danner
Davis (FL)
Davis (IL)
Deal
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Dixon
Doggett
Dooley
Doyle
Dreier
Duncan
Dunn
Edwards
Ehlers
Ehrlich
Emerson
Engel
English
Eshoo
Etheridge
Evans
Everett
Ewing
Farr
Filner
Foley
Ford
Fowler
Frank (MA)
Frelinghuysen
Frost
Gallegly
Ganske
Gejdenson
Gekas
Gephardt
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Gordon
Goss
Granger
Green (TX)
Green (WI)
Greenwood
Gutierrez
Gutknecht
Hall (OH)
Hall (TX)
Hansen
Hastings (FL)
Hayes
Hill (IN)
Hilliard
Hinchey
Hinojosa
Hobson
Hoeffel
Hoekstra
Holden
Holt
Hooley
Hostettler
Houghton
Hoyer
Hulshof
Hunter
Hutchinson
Hyde
Inslee
Isakson
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson, E. B.
Johnson, Sam
Jones (NC)
Jones (OH)
Kanjorski
Kaptur
Kelly
Kildee
Kilpatrick
Kind (WI)
King (NY)
Kleczka
Klink
Knollenberg
Kolbe
Kucinich
LaFalce
LaHood
Lampson
Lantos
Largent
Larson
Latham
LaTourette
Lazio
Leach
Lee
Levin
Lewis (CA)
Lewis (KY)
Lipinski
LoBiondo
Lofgren
Lowey
Lucas (KY)
Luther
Maloney (CT)
Maloney (NY)
Manzullo
Markey
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McCrery
McDermott
McGovern
McHugh
McIntosh
McIntyre
McKeon
McNulty
Meehan
Meeks (NY)
Menendez
Millender-McDonald
Miller, George
Minge
Mink
Moakley
Mollohan
Moore
Moran (KS)
Morella
Murtha
Myrick
Nadler
Napolitano
Neal
Ney
Northup
Norwood
Nussle
Oberstar
Obey
Olver
Ortiz
Ose
Owens
Oxley
Pallone
Pascrell
Pastor
Paul
Payne
Pelosi
Peterson (MN)
Petri
Phelps
Pickering
Pickett
Pomeroy
Porter
Portman
Price (NC)
Pryce (OH)
Quinn
Rahall
Ramstad
Rangel
Regula
Reyes
Reynolds
Riley
Rivers
Rodriguez
Roemer
Rogers
Rothman
Roukema
Roybal-Allard
Rush
Ryun (KS)
Sabo
Sanchez
Sanders
Sandlin
Sanford
Sawyer
Saxton
Schakowsky
Scott
Serrano
Sessions
Shaw
Sherman
Shimkus
Shows
Shuster
Sisisky
Skelton
Slaughter
Smith (WA)
Snyder
Spence
Spratt
Stark
Stenholm
Strickland
Stump
Stupak
Sweeney
Talent
Tanner
Tauscher
Taylor (MS)
Thomas
Thompson (CA)
Thompson (MS)
Thornberry
Thune
Thurman
Tiahrt
Tierney
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Velazquez
Vento
Visclosky
Vitter
Walsh
Wamp
Waters
Watkins
Watt (NC)
Watts (OK)
Waxman
Weiner
Weldon (PA)
Wexler
Weygand
Whitfield
Wicker
Wilson
Woolsey
Wu
Wynn
Young (AK)
Young (FL)
NOT VOTING--8
Campbell
Fattah
Kennedy
Lewis (GA)
Lucas (OK)
Meek (FL)
Moran (VA)
Wise
{time} 1455
Messrs. SPENCE, OLVER, McKEON, BERMAN and PICKERING changed their
vote from ``aye'' to ``no.''
Messrs. HEFLEY, GOODLATTE, DAVIS of Virginia, PACKARD, BURTON of
Indiana, and Ms. McKINNEY changed their vote from ``no'' to ``aye.''
So the amendment was rejected.
The result of the vote was announced as above recorded.
Amendment Offered by Mr. Delahunt
The CHAIRMAN pro tempore (Mrs. Biggert). The question is on the
amendment offered by the gentleman from Massachusetts (Mr. Delahunt).
The question was taken; and the Chairman pro tempore announced that
the noes appeared to have it.
Recorded Vote
Mr. DELAHUNT. Madam Chairman, I demand a recorded vote.
A recorded vote was ordered.
The CHAIRMAN pro tempore. This will be a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 208,
noes 219, not voting 8, as follows:
[Roll No. 156]
AYES--208
Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Baker
Baldacci
Baldwin
Barrett (WI)
Becerra
Bentsen
Berkley
Berman
Berry
Bishop
Blagojevich
Blumenauer
Boehlert
Bonior
Borski
Boswell
Boyd
Brady (PA)
Brady (TX)
Brown (FL)
Brown (OH)
Burr
Capps
Capuano
Cardin
Carson
Castle
Clay
Clayton
Clement
Clyburn
Coble
Condit
Conyers
Coyne
Cramer
Crowley
Cummings
Danner
Davis (FL)
Davis (IL)
DeGette
Delahunt
DeLauro
Dickey
Dicks
Dixon
Doggett
Dooley
Doyle
Duncan
Edwards
Emerson
Engel
Etheridge
Evans
Farr
Filner
Foley
Ford
Fowler
Frank (MA)
Frost
Ganske
Gephardt
Gillmor
Gonzalez
Gordon
Green (TX)
Greenwood
Gutierrez
Hall (OH)
Hall (TX)
Hastings (FL)
Hill (IN)
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Hoyer
Istook
Jackson (IL)
Jackson-Lee (TX)
Jenkins
John
Johnson, E. B.
Jones (NC)
Jones (OH)
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
Kind (WI)
King (NY)
Kleczka
Klink
Kucinich
LaFalce
Lampson
Lantos
Larson
Latham
Leach
Lee
Levin
Lewis (GA)
Lewis (KY)
Lowey
Luther
Maloney (CT)
Maloney (NY)
Markey
Mascara
Matsui
McCarthy (MO)
McDermott
McGovern
McKinney
McNulty
Millender-McDonald
Miller, George
Minge
Mink
Moakley
Moore
Moran (KS)
Myrick
Nadler
Napolitano
Neal
Ney
Nussle
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Paul
Payne
Peterson (MN)
Pickett
Porter
Price (NC)
Pryce (OH)
Rahall
Rangel
Regula
Reyes
Rodriguez
Roemer
Rogers
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sanford
Sawyer
Schakowsky
Scott
Serrano
Sherman
Shows
Shuster
Skelton
Slaughter
Snyder
Spratt
Stark
Stenholm
Stupak
Tanner
Tauscher
Thompson (CA)
Thompson (MS)
Thune
Thurman
Tierney
Turner
Udall (CO)
[[Page H2818]]
Udall (NM)
Velazquez
Vento
Visclosky
Waters
Watkins
Watt (NC)
Waxman
Weiner
Wexler
Weygand
Whitfield
Wilson
Woolsey
Wynn
NOES--219
Aderholt
Archer
Armey
Ballenger
Barcia
Barr
Barrett (NE)
Bartlett
Barton
Bass
Bateman
Bereuter
Biggert
Bilbray
Bilirakis
Bliley
Blunt
Boehner
Bonilla
Bono
Boucher
Bryant
Burton
Buyer
Callahan
Calvert
Camp
Canady
Cannon
Chabot
Chambliss
Chenoweth-Hage
Coburn
Collins
Combest
Cook
Cooksey
Costello
Cox
Crane
Cubin
Cunningham
Davis (VA)
Deal
DeFazio
DeLay
DeMint
Deutsch
Diaz-Balart
Dingell
Doolittle
Dreier
Dunn
Ehlers
Ehrlich
English
Eshoo
Everett
Ewing
Fletcher
Forbes
Fossella
Franks (NJ)
Frelinghuysen
Gallegly
Gejdenson
Gibbons
Gilchrest
Gilman
Goode
Goodlatte
Goodling
Goss
Graham
Granger
Green (WI)
Gutknecht
Hansen
Hastert
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill (MT)
Hilleary
Hilliard
Hobson
Hoekstra
Hooley
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Inslee
Isakson
Jefferson
Johnson (CT)
Johnson, Sam
Kasich
Kelly
Kingston
Knollenberg
Kolbe
Kuykendall
LaHood
Largent
LaTourette
Lazio
Lewis (CA)
Linder
Lipinski
LoBiondo
Lofgren
Lucas (KY)
Manzullo
Martinez
McCarthy (NY)
McCollum
McCrery
McHugh
McInnis
McIntosh
McIntyre
McKeon
Meehan
Meeks (NY)
Menendez
Metcalf
Mica
Miller (FL)
Miller, Gary
Mollohan
Morella
Murtha
Nethercutt
Northup
Norwood
Ose
Oxley
Packard
Pease
Pelosi
Peterson (PA)
Petri
Phelps
Pickering
Pitts
Pombo
Pomeroy
Portman
Quinn
Radanovich
Ramstad
Reynolds
Riley
Rivers
Rogan
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Salmon
Saxton
Scarborough
Schaffer
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Simpson
Sisisky
Skeen
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Souder
Spence
Stabenow
Stearns
Strickland
Stump
Sununu
Sweeney
Talent
Tancredo
Tauzin
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thornberry
Tiahrt
Toomey
Towns
Traficant
Upton
Vitter
Walden
Walsh
Wamp
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Wicker
Wolf
Wu
Young (AK)
Young (FL)
NOT VOTING--8
Bachus
Campbell
Fattah
Gekas
Lucas (OK)
Meek (FL)
Moran (VA)
Wise
{time} 1504
Mr. SIMPSON, Mr. HILLIARD, and Mrs. McCARTHY of New York changed
their vote from ``aye'' to ``no''.
Mr. ABERCROMBIE and Mr. Edwards changed their vote from ``no'' to
``aye''.
So the amendment was rejected.
The result of the vote was announced as above recorded.
Amendment Offered By Mr. Istook
The CHAIRMAN pro tempore (Mrs. Biggert). The pending business is the
demand for a recorded vote on the amendment offered by the gentleman
from Oklahoma (Mr. Istook) on which further proceedings were postponed
and on which the ayes prevailed by voice vote.
The Clerk will designate the amendment.
The Clerk designated the amendment.
Recorded Vote
The CHAIRMAN pro tempore. A recorded vote has been demanded.
A recorded vote was ordered.
The CHAIRMAN pro tempore. This is a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 289,
noes 138, not voting 7, as follows:
[Roll No. 157]
AYES--289
Ackerman
Aderholt
Allen
Andrews
Baca
Bachus
Baird
Baker
Baldacci
Baldwin
Ballenger
Barcia
Barrett (NE)
Barrett (WI)
Barton
Bateman
Becerra
Bentsen
Bereuter
Berkley
Berman
Berry
Bilirakis
Bishop
Blagojevich
Blumenauer
Boehlert
Bonior
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brady (TX)
Brown (FL)
Brown (OH)
Bryant
Burton
Buyer
Capps
Cardin
Carson
Castle
Chambliss
Chenoweth-Hage
Clay
Clayton
Clement
Clyburn
Coburn
Condit
Conyers
Costello
Coyne
Cramer
Crowley
Cubin
Cummings
Danner
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Diaz-Balart
Dicks
Dingell
Dixon
Dooley
Doyle
Duncan
Dunn
Edwards
Ehlers
Emerson
Engel
Eshoo
Etheridge
Evans
Ewing
Farr
Filner
Foley
Ford
Fowler
Frank (MA)
Frost
Gallegly
Ganske
Gejdenson
Gephardt
Gilchrest
Gillmor
Gonzalez
Gordon
Green (TX)
Greenwood
Hall (OH)
Hall (TX)
Hastings (FL)
Hastings (WA)
Hill (IN)
Hilleary
Hilliard
Hinchey
Hinojosa
Hoeffel
Hoekstra
Holden
Holt
Hooley
Hostettler
Hoyer
Hulshof
Hutchinson
Hyde
Isakson
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson, E. B.
Jones (NC)
Jones (OH)
Kanjorski
Kennedy
Kildee
Kilpatrick
Kind (WI)
King (NY)
Kleczka
Klink
Kucinich
LaFalce
LaHood
Lampson
Lantos
Largent
Larson
Latham
LaTourette
Leach
Lee
Lewis (CA)
Lewis (GA)
Lewis (KY)
Lowey
Lucas (KY)
Luther
Maloney (CT)
Maloney (NY)
Markey
Martinez
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McCrery
McDermott
McGovern
McIntyre
McKinney
McNulty
Meehan
Meeks (NY)
Menendez
Metcalf
Millender-McDonald
Miller, George
Minge
Mink
Moakley
Mollohan
Moore
Moran (KS)
Morella
Murtha
Myrick
Nadler
Napolitano
Neal
Nethercutt
Ney
Norwood
Nussle
Oberstar
Obey
Olver
Ortiz
Ose
Owens
Pallone
Pascrell
Pastor
Paul
Payne
Pelosi
Peterson (MN)
Petri
Phelps
Pickett
Pomeroy
Porter
Price (NC)
Pryce (OH)
Rahall
Ramstad
Rangel
Regula
Reyes
Riley
Rivers
Rodriguez
Roemer
Rogers
Ros-Lehtinen
Rothman
Roybal-Allard
Rush
Ryan (WI)
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schakowsky
Scott
Serrano
Shaw
Sherman
Shimkus
Shows
Shuster
Sisisky
Skelton
Slaughter
Smith (MI)
Smith (WA)
Snyder
Souder
Spence
Spratt
Stabenow
Stenholm
Stupak
Sweeney
Talent
Tanner
Tauscher
Taylor (MS)
Taylor (NC)
Thomas
Thompson (CA)
Thompson (MS)
Thune
Thurman
Tierney
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Velazquez
Vento
Visclosky
Vitter
Walsh
Wamp
Waters
Watkins
Watt (NC)
Watts (OK)
Waxman
Weiner
Weldon (PA)
Wexler
Weygand
Wicker
Wilson
Woolsey
Wu
Wynn
Young (AK)
Young (FL)
NOES--138
Abercrombie
Archer
Armey
Barr
Bartlett
Bass
Biggert
Bilbray
Bliley
Blunt
Boehner
Bonilla
Bono
Burr
Callahan
Calvert
Camp
Canady
Cannon
Capuano
Chabot
Coble
Collins
Combest
Cook
Cooksey
Cox
Crane
Cunningham
Davis (VA)
Deal
DeLay
DeMint
Dickey
Doggett
Doolittle
Dreier
Ehrlich
English
Everett
Fletcher
Forbes
Fossella
Franks (NJ)
Frelinghuysen
Gekas
Gibbons
Gilman
Goode
Goodlatte
Goodling
Goss
Graham
Granger
Green (WI)
Gutierrez
Gutknecht
Hansen
Hayes
Hayworth
Hefley
Herger
Hill (MT)
Hobson
Horn
Houghton
Hunter
Inslee
Johnson, Sam
Kaptur
Kasich
Kelly
Kingston
Knollenberg
Kolbe
Kuykendall
Lazio
Levin
Linder
Lipinski
LoBiondo
Lofgren
Manzullo
McCollum
McHugh
McInnis
McIntosh
McKeon
Mica
Miller (FL)
Miller, Gary
Northup
Oxley
Packard
Pease
Peterson (PA)
Pickering
Pitts
Pombo
Portman
Quinn
Radanovich
Reynolds
Rogan
Rohrabacher
Roukema
Royce
Ryun (KS)
Salmon
Sanford
Saxton
Scarborough
Schaffer
Sensenbrenner
Sessions
Shadegg
Shays
Sherwood
Simpson
Skeen
Smith (NJ)
Smith (TX)
Stearns
Strickland
Stump
Sununu
Tancredo
Tauzin
Terry
Thornberry
Tiahrt
Toomey
Upton
Walden
Weldon (FL)
Weller
Whitfield
Wolf
NOT VOTING--7
Campbell
Fattah
Lucas (OK)
Meek (FL)
Moran (VA)
Stark
Wise
{time} 1512
Mr. DICKEY changed his vote from ``aye'' to ``no''.
So the amendment was agreed to.
The result of the vote was announced as above recorded.
Stated for:
Mr. LEVIN. Madam chairman, on rollcall No. 157, the Istook Amendment,
I unintentionally cast my vote as ``no'' when I intended to vote
``aye.''
[[Page H2819]]
The CHAIRMAN pro tempore. The question is on the committee amendment
in the nature of a substitute, as amended.
The committee amendment in the nature of a substitute, as amended,
was agreed to.
The CHAIRMAN pro tempore. Under the rule, the Committee rises.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
Gillmor) having assumed the chair, Mrs. Biggert, Chairman pro tempore
of the Committee of the Whole House on the State of the Union, reported
that that Committee, having had under consideration the bill (H.R.
3709) to make permanent the moratorium enacted by the Internet Tax
Freedom Act as it applies to new, multiple, and discriminatory taxes on
the Internet, pursuant to House Resolution 496, she reported the bill
back to the House with an amendment adopted by the Committee of the
Whole.
The SPEAKER pro tempore. Under the rule, the previous question is
ordered.
Is a separate vote demanded on the amendment to the committee
amendment in the nature of a substitute adopted by the Committee of the
Whole? If not, the question is on the committee amendment in the nature
of a substitute.
The committee amendment in the nature of a substitute was agreed to.
The CHAIRMAN pro tempore. The question is on the engrossment and
third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
{time} 1515
Motion to Recommit Offered by Mr. Conyers
Mr. CONYERS. Mr. Speaker, I offer a motion to recommit.
The SPEAKER pro tempore (Mr. Gillmor). Is the gentleman opposed to
the bill?
Mr. CONYERS. Yes, sir.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:
Mr. Conyers moves to recommit the bill to the Committee on
the Judiciary with instructions to report back forthwith with
the following amendment:
Page 2, line 15, strike ``5-YEAR'' and insert ``2-YEAR''.
Page 2, line 23, strike ``2006'' and insert ``2003''.
The SPEAKER pro tempore. The gentleman from Michigan (Mr. Conyers) is
recognized for 5 minutes on his motion to recommit.
Mr. CONYERS. Mr. Speaker, this is a motion to recommit, which is a
very simple solution to the Delahunt amendment, which was nearly
accepted by eight votes a few minutes ago.
My motion would extend the present moratorium on Internet access
taxes and multiple discriminatory taxes for 2 years, from 2001 to 2003,
but would eliminate the grandfathering of State access taxes, unlike
that which was in the Delahunt amendment, which just recently failed.
By taking the grandfathering out, my colleagues, I suggest that we
have an excellent conclusion to a very difficult problem; namely, to
continue to work on this not for 6 or 7 years, but for only 2 years,
and to eliminate the grandfathering of the State access taxes that were
included in the Delahunt amendment, which many of us supported.
I urge that we support this motion to recommit, because I think it
will marry the best of both of these provisions.
Mr. NADLER. Mr. Speaker, will the gentleman yield?
Mr. CONYERS. I yield to the gentleman from New York, the ranking
subcommittee member on the Committee on the Judiciary.
Mr. NADLER. Mr. Speaker, the central question of this bill is
twofold: One, will we protect the Internet from multiple and
discriminatory taxes? And I think we all agree the answer is we must do
that. And, two, will we set it up in such a way that the States will
not be prevented from levying appropriate but nondiscriminatory and
nonburdensome sales taxes on transactions over the Internet so that the
tax bases are not destroyed, and so that all the local malls and stores
are not discriminated against?
A 2-year moratorium gives us the time to work that out without
allowing practices to become so set that it is impossible to deal with
that question later. So that is why we ought to adopt this motion to
recommit for 2 years. And unlike the previous 2-year amendment, it does
not grandfather in those multiple taxes in certain States.
So for a 2-year moratorium to deal with these questions and help
small businesses all over the country, my colleagues should vote for
this recommittal motion.
Mr. CONYERS. Reclaiming my time, Mr. Speaker, I tell my colleagues
that we cannot stop the information highway progress by hobbling it
with taxes. Our proposal would reach the support of the governors of
the labor movement, of the retailers, of the small business people who
cannot wait for 6 or 7 years.
Support this motion to recommit, which would limit the moratorium to
2 years and eliminate the grandfathering provision.
Mr. ISTOOK. Mr. Speaker, will the gentleman yield?
Mr. CONYERS. I yield to the gentleman from Oklahoma.
Mr. ISTOOK. Mr. Speaker, I thank the gentleman for yielding to me,
and I think everyone should be clear, Mr. Speaker. Previously we voted
on the Delahunt amendment. It was two things in one. It was changing
the 5-year moratorium to 2 years, and it was eliminating the, and I
guess it is a double negative, it was eliminating the elimination of
the grandfather clause. But what we have now in the motion to recommit
is one thing and only one thing. It changes the proposed 5-year
additional moratorium to 2 years.
So, instead of a moratorium that expires in October of 2006, it will
be a moratorium that expires in October of 2003. That is the issue.
Certainly with the speed at which knowledge advances and the Internet
progresses, to think we could hide our heads in the sand for 5 years,
on top of the next year and a half, I do not think is realistic and I
do not think it is responsible. So I certainly urge people to do the
commonsense thing.
We wanted to offer this amendment on the floor, but time limits did
not let us do so. This simply says not a 5-year moratorium, only 2. We
need to bring consensus together, bring the governors together, the
retailers, and all the key people involved with a consensus, with
renewing a moratorium in a responsible way.
Mr. CONYERS. Mr. Speaker, reclaiming my time, I want to assure my
colleagues that as soon as I talk to the chairman of this committee, as
ranking member, the Committee on the Judiciary will be ready to move
forward with expedited speed, as I look at the gentleman from Illinois
(Mr. Hyde), who is nodding his head in agreement.
Mr. Speaker, I urge the Members to support the recommit motion.
Mr. GOODLATTE. Mr. Speaker, I rise in opposition to the motion to
recommit.
Mr. Speaker, I urge my colleagues to oppose this motion to recommit.
It was just mentioned on the other side that we are all going to have
the opportunity, and it is a great opportunity to vote against new and
discriminatory taxes on the Internet, to vote against taxes on access
to the Internet, one of the most regressive taxes there is because
everybody pays the same amount no matter what their income is.
If that is the case, why would we vote to only make that provision
for 2 more years instead of for 5 more years? It is important to
understand this has absolutely nothing to do with the sales tax. The
sales tax is a separate debate. We will have the opportunity to have
hearings on it and debate it. This is an issue about discriminatory
taxes on the Internet, taxes that appear on people's phone bills and
other bills that get them on the Internet, and we should avail
ourselves of the opportunity to keep it at 5 years.
Those who voted for the Delahunt amendment earlier because they were
concerned about their grandfathering, can now join us in voting against
this motion to recommit because the grandfathering is left eliminated,
as it was in the original bill, which is the way it should be. This
should be equally and fairly applied to everyone.
So we have the opportunity today to send a message to the American
people that we do not want to tax children's opportunity to be educated
on the Internet, people's opportunity to shop
[[Page H2820]]
on the Internet. This is what this is about, not the sales tax issue.
Mr. COX. Mr. Speaker, will the gentleman yield?
Mr. GOODLATTE. I yield to the gentleman from California.
Mr. COX. Mr. Speaker, I thank the gentleman for yielding to me.
As the author of the legislation, along with Democratic Senator Ron
Wyden, in the other body, I just want to underscore what the gentleman
from Virginia (Mr. Goodlatte) has said. There are only two points that
need to be made so that we can vote on this motion to recommit.
The first is, as the gentleman from Virginia pointed out, that
nothing in the motion to recommit, nothing in the amendments that we
have adopted, nothing in the underlying legislation, and nothing in the
Cox-Wyden moratorium that we are extending here has anything to do with
sales taxes. The ban on multiple taxes, the ban on discriminatory taxes
in the current moratorium is what we are talking about extending here.
In my view, we ought not to have any taxes on Internet access because
we are trying to deal with the digital divide, and that ban should be
permanent. In addition, multiple taxes, taxes by two States on the same
commerce, ought to be banned indefinitely. And, likewise, also
discriminatory taxes that would target the Internet but not off-line
commerce. That is all this legislation is about.
The reason that we are having this debate at all is that people want
to take this perfectly good bill hostage so that they can get a debate
on a different subject, Internet sales taxes. I remember the cover of
National Lampoon some years back where they had this cute little puppy
with a pistol to its head, and it said, ``Buy this magazine or we'll
shoot this dog.'' It was a macabre example of the dark humor of the
editors of National Lampoon, but a good illustration of what is going
on here. We should not take this perfectly good Internet moratorium
hostage for our separate debate on sales taxes.
The 5 years is already a compromise. Let us go with that compromise,
as we have earlier, so that we can move forward and provide certainty
to the participants in the new economy that there will not be
discriminatory and multiple taxes on the Internet.
Mr. GOODLATTE. Mr. Speaker, reclaiming my time, in a few minutes, we
will have the opportunity to all join together and vote for final
passage of this legislation, which will do a great thing for the
American taxpayers. In the meantime, I would urge my colleagues to vote
against this motion to recommit.
{time} 1530
Let us not miss the opportunity to keep these access charges, these
regressive charges. We talk about the digital divide. This is the kind
of thing that keeps a lower-income person off of the Internet, these
kind of taxes on access to the Internet.
That is what this is about. It is not about the sales tax. That is to
be saved for another day, and we are going to take that up and hold
hearings on it in the Committee on the Judiciary soon. This is about
another issue that we ought to join together and pass and send to the
American people a message that we want them all on the Internet, we
want them all availing themselves of these new opportunities in the
Information Age and no one should be left out because of discriminatory
taxes, because of multiplicitous taxes or because of taxes on access to
the Internet.
I urge my colleagues to reject the motion to recommit and join with
me in supporting final passage of this legislation.
The SPEAKER pro tempore (Mr. Gillmor). Without objection, the
previous question is ordered on the motion to recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Recorded Vote
Mr. CONYERS. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair
will reduce to a minimum of 5 minutes the period of time within which a
vote by electronic device, if ordered, will be taken on the question of
passage of the bill.
The vote was taken by electronic device, and there were--ayes 177,
noes 250, not voting 7, as follows:
[Roll No. 158]
AYES--177
Abercrombie
Ackerman
Allen
Baca
Baird
Baldacci
Baldwin
Barrett (WI)
Becerra
Bentsen
Berkley
Berman
Berry
Bishop
Blagojevich
Blumenauer
Bonior
Borski
Boyd
Brady (PA)
Brown (FL)
Brown (OH)
Capps
Capuano
Cardin
Carson
Clay
Clayton
Clyburn
Condit
Conyers
Costello
Coyne
Crowley
Cummings
Danner
Davis (FL)
Davis (IL)
DeGette
Delahunt
DeLauro
Dicks
Dingell
Dixon
Doggett
Dooley
Doyle
Edwards
Engel
Etheridge
Evans
Farr
Filner
Ford
Frank (MA)
Frost
Ganske
Gephardt
Gonzalez
Gordon
Green (TX)
Gutierrez
Hall (OH)
Hall (TX)
Hastings (FL)
Hill (IN)
Hilliard
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Hoyer
Inslee
Istook
Jackson (IL)
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
Kind (WI)
Kleczka
Klink
Kucinich
LaFalce
Lampson
Lantos
Larson
LaTourette
Lee
Levin
Lewis (GA)
Lowey
Luther
Maloney (CT)
Maloney (NY)
Markey
Mascara
Matsui
McCarthy (MO)
McDermott
McGovern
McIntyre
McKinney
McNulty
Meeks (NY)
Millender-McDonald
Miller, George
Minge
Mink
Moakley
Moore
Murtha
Nadler
Napolitano
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Peterson (MN)
Pickett
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rodriguez
Roemer
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schakowsky
Scott
Serrano
Sherman
Skelton
Slaughter
Snyder
Spratt
Stark
Stenholm
Stupak
Tanner
Thompson (CA)
Thompson (MS)
Thune
Thurman
Tierney
Towns
Turner
Udall (CO)
Velazquez
Vento
Visclosky
Waters
Watkins
Watt (NC)
Waxman
Weiner
Weygand
Woolsey
Wu
Wynn
NOES--250
Aderholt
Andrews
Archer
Armey
Bachus
Baker
Ballenger
Barcia
Barr
Barrett (NE)
Bartlett
Barton
Bass
Bateman
Bereuter
Biggert
Bilbray
Bilirakis
Bliley
Blunt
Boehlert
Boehner
Bonilla
Bono
Boswell
Boucher
Brady (TX)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Canady
Cannon
Castle
Chabot
Chambliss
Chenoweth-Hage
Clement
Coble
Coburn
Collins
Combest
Cook
Cooksey
Cox
Cramer
Crane
Cubin
Cunningham
Davis (VA)
Deal
DeFazio
DeLay
DeMint
Deutsch
Diaz-Balart
Dickey
Doolittle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
English
Eshoo
Everett
Ewing
Fletcher
Foley
Forbes
Fossella
Fowler
Franks (NJ)
Frelinghuysen
Gallegly
Gejdenson
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Goode
Goodlatte
Goodling
Goss
Graham
Granger
Green (WI)
Greenwood
Gutknecht
Hansen
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill (MT)
Hilleary
Hobson
Hoekstra
Hooley
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Isakson
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson, Sam
Jones (NC)
Kasich
Kelly
King (NY)
Kingston
Knollenberg
Kolbe
Kuykendall
LaHood
Largent
Latham
Lazio
Leach
Lewis (CA)
Lewis (KY)
Lipinski
LoBiondo
Lofgren
Lucas (KY)
Manzullo
Martinez
McCarthy (NY)
McCollum
McCrery
McHugh
McInnis
McIntosh
McKeon
Meehan
Menendez
Metcalf
Mica
Miller (FL)
Miller, Gary
Mollohan
Moran (KS)
Morella
Myrick
Nethercutt
Ney
Northup
Norwood
Nussle
Ose
Oxley
Packard
Paul
Pease
Pelosi
Peterson (PA)
Petri
Phelps
Pickering
Pitts
Pombo
Porter
Portman
Pryce (OH)
Quinn
Radanovich
Ramstad
Regula
Reynolds
Riley
Rivers
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Salmon
Sanford
Saxton
Scarborough
Schaffer
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shows
Shuster
Simpson
Sisisky
Skeen
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Souder
Spence
Stabenow
Stearns
Strickland
Stump
Sununu
Sweeney
[[Page H2821]]
Talent
Tancredo
Tauscher
Tauzin
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thornberry
Tiahrt
Toomey
Traficant
Udall (NM)
Upton
Vitter
Walden
Walsh
Wamp
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Wexler
Whitfield
Wicker
Wilson
Wolf
Young (AK)
Young (FL)
NOT VOTING--7
Campbell
Fattah
Linder
Lucas (OK)
Meek (FL)
Moran (VA)
Wise
{time} 1548
Mr. LEWIS of Kentucky changed his vote from ``aye'' to ``no.''
Mr. HALL of Ohio changed his vote from ``no'' to ``aye.''
So the motion to recommit was rejected.
The result of the vote was announced as above recorded.
The SPEAKER pro tempore (Mr. Gillmor). The question is on the passage
of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Recorded Vote
Mr. CONYERS. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. This is a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 352,
noes 75, not voting 7, as follows:
[Roll No. 159]
AYES--352
Ackerman
Aderholt
Andrews
Archer
Armey
Baca
Bachus
Baker
Baldacci
Ballenger
Barcia
Barr
Barrett (NE)
Barrett (WI)
Bartlett
Barton
Bass
Bateman
Becerra
Bereuter
Berkley
Berman
Berry
Biggert
Bilbray
Bilirakis
Bishop
Bliley
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bono
Boswell
Boucher
Brady (TX)
Brown (FL)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Canady
Cannon
Capps
Cardin
Carson
Castle
Chabot
Chambliss
Chenoweth-Hage
Clement
Coble
Coburn
Collins
Combest
Cook
Cooksey
Costello
Cox
Cramer
Crane
Crowley
Cubin
Cummings
Cunningham
Davis (FL)
Davis (VA)
Deal
DeFazio
DeGette
DeLauro
DeLay
DeMint
Deutsch
Diaz-Balart
Dickey
Dicks
Dingell
Dixon
Doggett
Dooley
Doolittle
Doyle
Dreier
Duncan
Dunn
Edwards
Ehlers
Ehrlich
Emerson
Engel
English
Eshoo
Etheridge
Evans
Everett
Ewing
Farr
Filner
Fletcher
Foley
Forbes
Ford
Fossella
Fowler
Franks (NJ)
Frelinghuysen
Frost
Gallegly
Gejdenson
Gekas
Gephardt
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Goode
Goodlatte
Goodling
Goss
Graham
Granger
Green (TX)
Green (WI)
Greenwood
Gutierrez
Gutknecht
Hall (OH)
Hansen
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill (IN)
Hill (MT)
Hilleary
Hinojosa
Hobson
Hoeffel
Hoekstra
Holden
Holt
Hooley
Horn
Hostettler
Houghton
Hoyer
Hulshof
Hunter
Hutchinson
Hyde
Inslee
Isakson
Istook
Jefferson
Jenkins
John
Johnson (CT)
Johnson, E. B.
Johnson, Sam
Jones (NC)
Kaptur
Kasich
Kelly
Kildee
Kind (WI)
King (NY)
Kingston
Kleczka
Klink
Knollenberg
Kolbe
Kuykendall
Lampson
Lantos
Largent
Larson
Latham
LaTourette
Lazio
Leach
Lewis (CA)
Lewis (GA)
Lewis (KY)
Linder
LoBiondo
Lofgren
Lowey
Lucas (KY)
Luther
Maloney (CT)
Maloney (NY)
Manzullo
Martinez
Mascara
McCarthy (NY)
McCollum
McCrery
McGovern
McHugh
McInnis
McIntosh
McIntyre
McKeon
McKinney
McNulty
Meehan
Meeks (NY)
Menendez
Metcalf
Mica
Millender-McDonald
Miller (FL)
Miller, Gary
Mink
Moakley
Mollohan
Morella
Murtha
Myrick
Nadler
Napolitano
Northup
Norwood
Nussle
Ortiz
Ose
Owens
Oxley
Packard
Pallone
Pascrell
Pastor
Pease
Pelosi
Peterson (PA)
Petri
Phelps
Pickering
Pickett
Pitts
Pombo
Pomeroy
Portman
Price (NC)
Pryce (OH)
Quinn
Radanovich
Rahall
Ramstad
Rangel
Regula
Reyes
Reynolds
Riley
Rivers
Rodriguez
Roemer
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Salmon
Sanchez
Sandlin
Sawyer
Saxton
Scarborough
Schaffer
Sensenbrenner
Serrano
Sessions
Shadegg
Shaw
Shays
Sherman
Sherwood
Shimkus
Shows
Simpson
Sisisky
Skeen
Skelton
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Souder
Spence
Stabenow
Stearns
Strickland
Stump
Stupak
Sununu
Sweeney
Talent
Tancredo
Tanner
Tauscher
Tauzin
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thompson (CA)
Thompson (MS)
Thornberry
Thurman
Tiahrt
Toomey
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Upton
Velazquez
Visclosky
Vitter
Walden
Walsh
Wamp
Waters
Watkins
Watts (OK)
Waxman
Weiner
Weldon (FL)
Weldon (PA)
Weller
Wexler
Weygand
Whitfield
Wicker
Wilson
Wolf
Woolsey
Wu
Wynn
Young (AK)
Young (FL)
NOES--75
Abercrombie
Allen
Baird
Baldwin
Bentsen
Blagojevich
Bonior
Borski
Boyd
Brady (PA)
Brown (OH)
Capuano
Clay
Clayton
Clyburn
Condit
Conyers
Coyne
Danner
Davis (IL)
Delahunt
Frank (MA)
Ganske
Gordon
Hall (TX)
Hastings (FL)
Hilliard
Hinchey
Jackson (IL)
Jackson-Lee (TX)
Jones (OH)
Kanjorski
Kennedy
Kilpatrick
Kucinich
LaFalce
LaHood
Lee
Levin
Lipinski
Markey
Matsui
McCarthy (MO)
McDermott
Miller, George
Minge
Moore
Moran (KS)
Neal
Ney
Oberstar
Obey
Olver
Paul
Payne
Peterson (MN)
Porter
Rothman
Roybal-Allard
Rush
Sabo
Sanders
Sanford
Schakowsky
Scott
Shuster
Slaughter
Snyder
Spratt
Stark
Stenholm
Thune
Tierney
Vento
Watt (NC)
NOT VOTING--7
Campbell
Fattah
Lucas (OK)
Meek (FL)
Moran (VA)
Nethercutt
Wise
{time} 1602
Messrs. HASTINGS of Florida, GEORGE MILLER of California, BENTSEN and
MINGE changed their vote from ``aye'' to ``no.''
So the bill was passed.
The result of the vote was announced as above recorded.
The title of the bill was amended so as to read: ``A bill to extend
for 5 years the moratorium enacted by the Internet Tax Freedom Act; and
for other purposes.''.
A motion to reconsider is laid upon the table.
____________________