[Congressional Record (Bound Edition), Volume 147 (2001), Part 2]
[Senate]
[Pages 1614-1615]
[From the U.S. Government Publishing Office, www.gpo.gov]



      INTERNET NON-DISCRIMINATION AND SALES TAX SIMPLIFICATION ACT

  Mr. LEAHY. Mr. President, I rise today to add my support to promoting 
electronic commerce and keeping it free from discriminatory and 
multiple state and local taxes. I am pleased to join the senior senator 
from Oregon as an original cosponsor of the Internet Non-Discrimination 
and Sales Tax Simplification Act. I commend Senator Wyden for his 
continued leadership on Internet tax policy.
  The Internet has changed the way we do business. Today, businesses 
can sell their goods and services all over the world in the blink of an 
eye. E-commerce has created new markets, new efficiencies and new 
products. In fact, retail revenues from electronic commerce grew from 
$13 billion in 1999 to $26 billion in 2000. Retail sales are expected 
to continue to grow on the Internet to $178 billion in 2005.
  The growth of electronic commerce is everywhere, including my home 
state of Vermont. Today, hundreds of Vermont businesses are doing 
business on the Internet, ranging from the Vermont Teddy Bear Company 
to Al's Snowmobile Parts Warehouse to Ben & Jerry's Homemade Ice Cream.
  Let me just give you a few examples of Cyberselling in Vermont:
  The New York Times recently profiled Buch Spieler, a Montpelier music 
store, as a shining example of the power of the Internet to boost sales 
and change the way many local stores do business. According to Fred 
Wilber, who has been running Buch Spieler for the past 27 years, 
overall sales has jumped by 10 percent and its customer base has 
expanded by 20 percent in the 18 months since he took his business 
online.
  Gardeners Supply Company of Burlington opened its web site five years 
ago to accompany its catalog of environmentally-sound products. With an 
average annual growth rate of about 150 percent, Gardeners now sells 
more than $10 million worth of products online.
  Pompanoosuc Mills, a furniture company in Thetford, has been online 
for about two years. In its first year, the company made about $1,300 a 
week from Internet-related sales. By its second year, online sales had 
tripled to $4,000 a week.
  Green Mountain Coffee Roasters, based in Waterbury, went on the web 
to gain more direct access to consumers since its coffee business was 
about 95 percent wholesale. Today, Green Mountain has doubled its 
retail sales through the Internet.
  And Burr Morse, President of Morse Farm Sugar Works, outside 
Montpelier, sold so much maple syrup online that he testified before 
the Senate Commerce Committee on the benefits of e-commerce for small 
businesses nationwide.
  For the past five years I have learned first-hand about this e-
commerce explosion by hosting annual workshops on Internet sales. At my 
Doing Business On The Internet Workshops in Vermont, small business 
owners recounted tales of successful selling on the Web and share their 
tips for future success with fellow entrepreneurs. For instance, Megan 
Smith of The Vermont Inn in Killington attended one of the workshops 
and now takes reservations over the Net from customers all across the 
country and around the world. And Maura Malone attended our workshops 
for the past three years in a row to learn how to reach more customers 
for her fabric/quilt store, Back Country Threads, which is deep in the 
woods in Essex. She created her own website and won the ``Top Customer 
Service Award'' from Yahoo Store for the last 10 months running.
  These Vermont cybersellers are of all sizes and customer bases, from 
Main Street merchants to boutique entrepreneurs to a couple of famous 
ex-hippies who sell great ice cream. But what Vermont online sellers do 
have in common is that Internet commerce allows them to erase the 
geographic barriers that historically have limited our access to major 
markets. With the power of the Internet, Vermonters can sell their 
products and services anywhere, anytime. Cyberselling is paying off for 
Vermont and the rest of the nation.
  With the Internet's exciting economic opportunities come unique 
challenges. One of the critical challenges in our new economy is 
developing fair and balanced tax policy that respects the rights of 
states and local jurisdictions while fostering a stable environment for 
e-commerce to continue to grow. I

[[Page 1615]]

believe the Internet Non-Discrimination and Sales Tax Simplification 
Act strikes that fair balance.
  Our legislation extends the current moratorium against discriminatory 
and multiple taxes on goods and services sold over the Internet through 
2006. The current three-year moratorium, enacted as part of the 1998 
Internet Tax Freedom Act, which I was proud to cosponsor, is set to 
expire in October 2001. This five-year extension of the moratorium was 
one of the recommendations in the Advisory Commission on Electronic 
Commerce's April 2000 report to Congress.
  Electronic commerce is beginning to blossom, but it is still in its 
infancy. Stability is key to reaching its full potential, and creating 
new tax categories for the Internet is exactly the wrong thing to do. 
Internet commerce should not be subject to discriminatory new taxes 
that do not apply to other commerce.
  Indeed, without the current moratorium, there are 30,000 different 
jurisdictions around the country that could levy discriminatory or 
multiple Internet taxes on e-commerce. We need to continue the 
moratorium to provide the stability necessary for electronic commerce 
to flourish. We are not asking for a tax-free zone on the Internet; if 
sales taxes and other taxes would apply to traditional sales and 
services, then those taxes would also apply to Internet sales under our 
legislation. But our legislation would continue the ban on any taxes 
applied only to Internet sales in a discriminatory manner.
  Let's not allow the future of electronic commerce--with its great 
potential to expand the markets of Main Street businesses--to be 
crushed by the weight of multiple or discriminatory taxation.
  While Congress should continue to prevent discriminatory e-commerce 
taxes, we also need a national policy to make sure that the traditional 
state and local sales taxes on Internet sales are applied and collected 
fairly and uniformly. Our bill encourages states to simplify their 
sales tax rules and to develop national standards on e-commerce. To 
help state and local governments improve their collection of sales 
taxes on e-commerce, our bill authorizes Congress to consider 
legislation under fast-track procedures to require sellers to collect 
sales taxes on goods and services sold over the Internet.
  I commend the National Conference of State Legislatures and the 
National Governors Association for their efforts to create uniformity 
among states for the collection of remote sales taxes. I hope our 
legislation will further this simplification process as state 
legislatures and governors around the nation work together to come up 
with national standards for e-commerce taxation. I pledge to work with 
them to reach consensus on these difficult remote tax issues.
  Today, there are more than a million businesses selling their sales 
and services on the World Wide Web around the world. This explosion in 
Web growth has led to thousands of new jobs and exciting opportunities 
for businesses from Main Street to Wall Street. A March 1999 survey of 
e-commerce in Vermont that I commissioned found that Vermont businesses 
had already created 1,404 jobs as a result of Internet commerce--with 
the potential to create 24,280 new jobs in my home state by the end of 
this year. The Internet Non-Discrimination and Sales Tax Simplification 
Act will insure that Vermonters continue to reap the rewards of 
electronic commerce.
  E-Commerce is booming, our moratorium law is working, and we should 
keep a good thing going and growing. I am proud to cosponsor the 
Internet Non-Discrimination and Sales Tax Simplification Act to 
encourage online commerce to continue to grow with confidence. I urge 
my colleagues to support its swift passage into law.

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