[Congressional Record (Bound Edition), Volume 147 (2001), Part 3]
[Senate]
[Page 3891]
[From the U.S. Government Publishing Office, www.gpo.gov]



                 EXTENDING THE INTERNET TAX MORATORIUM

  Mr. BURNS. Mr. President, I commend the chairman of the Committee on 
Commerce, Science, and Transportation for holding today's hearing, as 
it concerns a topic of great importance to the future development of 
the Internet--how to make sure that our Nation's tax policy keeps pace 
with rapid technological change.
  The Internet Tax Freedom Act recognized that uniformity and common 
sense must be brought to taxation policy on the Internet. The act 
placed a 3-year moratorium on State and local taxes that discriminate 
against online transactions. I strongly supported the bill and welcomed 
its passage by the Senate.
  This hearing is particularly timely, as the moratorium on 
discriminatory taxes on electronic commerce expires on October 21. If 
the moratorium is not extended, our small businesses across the country 
face the burden of having to comply with the requirements of over 7,000 
taxing jurisdictions.
  I am more convinced than ever of the folly of imposing a devastating 
patchwork of taxes on Internet transactions. I agree with the 
recommendation of the Advisory Commission on Electronic Commerce that 
we should extend the moratorium. I would like to add my name as a 
cosponsor to the Wyden bill, the Internet Tax Nondiscrimination Act, 
which will keep the Internet a ``tax-free'' zone until December 31, 
2006 and will help foster the growth of electronic commerce.
  Both consumers and businesses will benefit from a reasoned Internet 
tax policy. Growth will create more revenue and an expanding tax base 
for the future. The empowering aspects of the Internet for small 
business--low barriers to entry and an immediate global reach--must not 
be inhibited by a heavy-handed government approach to Internet 
taxation. Extending the moratorium on discriminatory taxes on Internet 
transactions will help to ensure that the nearly limitless potential of 
electronic commerce is realized.
  I would like to touch on another issue arising from this debate, the 
broader question of whether Congress should allow the States to require 
all remote sellers--be they over the new medium of the Internet, or the 
more traditional mediums of mail order or telephone to collect sales 
tax on deliveries into states where the seller has no physical presence 
or ``tax nexus.''
  I believe the current rules on whether an out-of-state company should 
collect sales tax are, in fact, fair and reasonable. Simply stated, a 
company is required to collect tax on deliveries into a State if it has 
a presence in that State. This rule has served interstate commerce 
well, and importantly, has not burdened small, entrepreneurial 
companies with having to hire lawyers and accountants to comply with 
7,600 different taxing jurisdictions, and worse still, liability to 
audit from States and localities throughout the country.
  I'm not prepared at this point to support any new tax collecting 
requirements on remote commerce. However, if this committee were to act 
on this broader issue, the Wyden bill's approach, which requires full 
congressional scrutiny and a mandatory up-or-down vote by Congress 
before there is any new tax collecting, seems to me to be the correct 
course.

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