[Congressional Record Volume 146, Number 58 (Thursday, May 11, 2000)]
[Extensions of Remarks]
[Page E712]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 INTERNET NONDISCRIMINATION ACT OF 2000

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                               speech of

                            HON. MAX SANDLIN

                                of texas

                    in the house of representatives

                        Wednesday, May 10, 2000

       The House in Committee of the Whole House on the State of 
     the Union 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,

  Mr. SANDLIN. Mr. Chairman, I rise today to address H.R. 3709, The 
Internet Nondiscrimination Act. The Internet transformed business and 
commerce in a revolutionary fashion. Congress now must face the 
daunting task of shaping policy concerning its taxation.
  Mr. Chairman, I come from East Texas, a region that has a heavy 
concentration of small businesses. Under law, these businesses are 
required to collect sales tax. In 1992, the U.S. Supreme Court ruled 
that states cannot require businesses without a physical presence in 
their geographic area to collect and remit sales taxes. Small 
businesses were essentially rendered uncompetitive under this ruling. 
These ``brick and mortar'' stores now face extinction because they are 
forced to compete with online businesses who do not have to collect 
state and local taxes.
  As things stand, state and local governments lose about $5 billion 
annually in uncollected sales taxes on mail order purchases and are 
expected to lose about $15 billion annually in uncollected sales taxes 
on Internet purchases by the year 2003. I am aware that the Internet is 
the engine driving current economic growth and am in no way trying to 
jeopardize its growth. The Internet provides access to products that my 
rural constituents would not otherwise be able to purchase. However, I 
believe that electronic commerce and small business should exist on a 
level playing field with regard to taxation. It is time that Congress 
begins to address the task of creating a fair tax code for online 
retailers and their brick and mortar counterparts.
  I urge my colleagues to work toward a technology neutral, simplified, 
sales tax system which guarantees that buyers and sellers are treated 
equally. it is important that Congress be given and appropriate period 
of time to build a consensus on the long-term solution to Internet 
taxation issues. We must be careful to avoid a hasty, ill-conceived tax 
system that places unnecessary tax burdens on our consumers and 
sellers.
  I stand in support of H.R. 3709, The Internet Nondiscrimination Act. 
It is my hope that, in the future, Congress will go one legislative 
step further and address the issues surrounding e-commerce taxation.

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