| Statement of Sen. Ron Wyden (D-OR) in
Congressional Record. Re: introduction of S 2028, the Internet Non- Discrimination Act. Date: February 3, 2000. Source: Congressional Record, February 3, 2000. Editor's Notes: |
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Mr. WYDEN. Mr. President, today, I am introducing the Internet Non-Discrimination Act. The central principle of this bill is that our tax policy should not discriminate against the most vibrant part of our nation's economy. The legislation would extend indefinitely the Internet Tax Freedom's Act's three-year moratorium on discriminatory taxes against the Internet and electronic commerce. I am pleased to be joined in this effort by Senators Abraham and Leahy.
Three years ago, when Congressman Chris Cox and I introduced the Internet Tax Freedom Act (ITFA), we said you can't squeeze the new economy into a set of rules written for smokestack industry. At that time, opponents predicted that retailers would vanish from Main Streets across America. Transcripts from hearings held on the legislation in the summer of 1997 are replete with opponents' predictions that a parade of horribles would be visited on every small merchant in every town in the United States. I am pleased to report that none of the horribles has come to pass.
In fact, this is what has happened in the 15 months since the Internet Tax Freedom Act was passed by the Senate 98-2 and became law.
States and localities have continued to collect sales and use taxes, and state budgets ended fiscal l999 with a $35 billion surplus. In California--one of the most wired states--1999 sales tax collections are up 20 percent over 1998.
Traditional bricks and mortar retailers had one of their best holiday seasons, recording a nearly 8% jump in sales over the previous year.
A recent survey of 1,500 Main Street businesses nationwide found that 74 percent have gone online since l997.
E-commerce has become part of the retail landscape, but still accounts for only 3/10 s of one percent of total retail sales.
States with the highest level of Internet use are also those with some of the largest gains in tax revenues.
It is clear to me that while state and local tax collectors sat wringing their hands, America's merchants were working on web pages. Main Street merchants seized the opportunity to expand their sales to new markets by going online. They also recognized the efficiencies of conducting their business-to-business transactions online. Rather than weaken Main Street merchants, the Internet has strengthened them. Rather than drain state and local tax coffers, the technological neutrality of the Internet Tax Freedom Act allowed online business to grow and state and local authorities to continue to collect lawful, nondiscriminatory taxes. The technological neutrality of the ITFA contributed to the rapid transformation of a bricks and mortar economy into a clicks and mortar economy.
I want the success of the bricks and clicks economy to continue, but consumers and businesses need some certainty. They need to know they won't have to start paying new taxes targeted specifically at e-commerce when the current moratorium expires in October 2001. That's why the ban on discriminatory taxes against the Internet and e-commerce should be made permanent.
The Internet Non-Discrimination Act we are introducing today will do just that. It continues the policy of technological neutrality. It allows state and local tax authorities to continue to collect lawful, nondiscriminatory sales or use taxes on online sales. It will give the governors time to see if they can move forward with their technological fix for collecting remote sales and use tax--a voluntary plan which will require the cooperation of every business in this nation, from Bandon, Oregon to Bangor, Maine. And, finally, it extends permanently a policy that has worked well for the last 15 months and under which consumers, businesses and state and local tax collectors have lived--and thrived.
In about two months the Advisory Commission on Electronic Commerce will issue its final report. After having talked yesterday with the Chairman of the Commission, Virginia Governor James Gilmore, I am hopeful that the Commission will endorse the approach we are taking in this bill.
If Congress does not act this year to extend the technologically neutral policy that is at the heart of the Internet Non-Discrimination Act, consumers and businesses will face thousands of tax authorities in this country jumping into their pockets when the current moratorium expires in October 2001. Consumers and businesses want certainty that they won't suddenly be facing an onslaught of new, confusing and discriminatory taxes.
A companion bill is being introduced in the House of Representatives today by Congressman Chris Cox, with whom I've worked on this issue for four years now. I am hopeful that this, our fourth bipartisan Internet effort, will be as successful as our previous three. I ask unanimous consent that the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the Record,
as follows:
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'.
SEC. 2. REPLACEMENT OF MORATORIUM WITH PERMANENT BAN ON NEW, MULTIPLE, AND DISCRIMINATORY TAXES ON THE INTERNET.
Section 1101(a) of title XI of division C of Public Law 105-277 is amended by striking `during the period beginning on October 1, 1998, and ending 3 years after the date of enactment of this Act' and inserting `on or after October 1, 1998.'