Sen. Hollings Introduces Bill to Tax Internet Sales

(August 2, 1999) Sen. Ernest Hollings introduced a bill on July 26 that would impose a national tax on Internet and direct mail sales.

S 1433 IS would amend the Internal Revenue Code by providing that "There is hereby imposed on the first retail sale of merchandise effected via the Internet, by mail order through a catalog, or by direct sales other than through a local merchant, a tax equal to 5 percent of the price for which so sold."

Last year the Congress passed, and the President signed into law, the Omnibus Appropriations Bill, which included the Internet Tax Freedom Act. That law imposes a three year moratorium on new discriminatory taxes on the Internet.

In January of this year, Sen. Bob Smith (I-NH) introduced S 328 IS, an untitled bill that would make the moratorium permanent. The Senate has not taken any action on either bill.

Sen. Ernest Hollings (D-SC)

While many Senators and Representatives have recently sought to portray themselves as supportive of high tech, Sen. Fritz Hollings (D-SC) is leading the fight against some items on the high-tech agenda.

For example, Sen. Hollings recently led a long and stubborn fight in the Senate against passage a Y2K litigation reform bill. Sen. Hollings, who has been in the Senate since 1966, was once a trial lawyer. He remains close to the Plaintiff's trial lawyers. The bill (S 96 and HR 775) was signed into law on July 20.

He has also been the lead cosponsor, both in the current Congress, and in the 105th Congress, of legislation that would require schools and libraries receiving e-rate funds to use filtering software to block access to Internet porn.

The bill has no cosponsors.