[Congressional Record Volume 146, Number 58 (Thursday, May 11, 2000)]
[Extensions of Remarks]
[Page E720]
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. KAREN McCARTHY

                              of missouri

                    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.

  Ms. McCARTHY of Missouri. Mr. Chairman, I rise to express concerns 
about HR 3709, the Internet Nondiscrimination Act, a bill which extends 
the moratorium contained in The Internet Tax Freedom Act of 1998 for 
five additional years until 2006.
  As a former Chairman of the Ways and Means Committee of the Missouri 
state house and former president of National Council of State 
Legislators (NCSL), I believe we need to address this issue with an eye 
toward creating a win-win situation for our states and localities, our 
mom and pop retailers on Main Street and the technology sector. I am 
not convinced that this bill has balanced all interests in a manner 
which achieves that goal.
  I want electronic commerce to prosper and I support eliminating 
discriminatory taxes on this type of commerce. However, I also support 
finding a way to ensure Main Street businesses and state and local 
governments are not penalized by competitive advantages enjoyed by 
internet commerce companies. We need a level playing field and I am 
committed to finding one.
  Not leveling the playing field could result in billions of dollars in 
lost revenue to states. By 2003 states will lose a total of 
approximately $20.1 billion in revenue if businesses are not required 
to collect the use taxes that are owed by purchases on electronic 
commerce. My state of Missouri will lose a projected $395 million--how 
will Missouri make up that revenue stream to ensure adequate funds for 
public education, critical infrastructure needs and other important 
state programs?
  The piecemeal approach in HR 3709 prevents comprehensive solutions to 
the subject of taxes on the Internet. The existing moratorium does not 
expire until October 21, 2001. Merely extending the moratorium does not 
address the main issue of providing a level playing field for sales tax 
collection. In the coming 17 months which remain in the existing 
moratorium, we must consider comprehensive solutions.
  Without a measured and thoughtful approach to addressing this complex 
issue we jeopardize the basic services which our constituents rely upon 
from our states and localities. We must sustain growth of the Internet 
and e-commerce with an appropriate revenue collecting structure built 
upon a foundation of fairness and equity to Main Street merchants.

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