Statement by Bill Clinton.
Re: Internet taxation.
Date: March 29, 2000.
Event: Press conference in the East Room of the White House.
Source: U.S. Department of State.

QUESTION: The Internet Commission is meeting on electronic commerce and they are giving some proposals. What are your thoughts about what proposals you think they should come out with? And also what about the states, as electronic commerce becomes more and more available on the net and may take revenue from the states?

THE PRESIDENT: Well, I think, first of all, I supported the moratorium on taxes and I saw where Mr. Gephardt did as well a couple of days ago and I think that's good. I think that we should.

I think that the process that has been set up is the right one. I don't know what the solution is, but I think the states are going to have to get together with these companies and figure out -- first of all, I don't think there should be any access taxes or new transactional taxes or anything that will overly burden Internet commerce, because it is making a real contribution to our economy.

The real issue is, as a higher and higher percentage of sales are conducted over the Internet, what happens to the sales tax base of the states? Are they going to have to go to a different kind of taxation? Because they don't want to prejudice ordinary retailers. On the other hand, some of the people in the Internet business think that any sales tax will put them at a disadvantage because they have to charge shipping charges.

So I think that is a matter that the states will have to work out. Since they are basically state taxes, I think we ought to leave it to them. But the governors are highly attuned to economic development. They will not lightly hurt their economies. But they also have responsibilities to fund their schools and other public services. And I just think they are going to have to work through it.

I think over the next year or so, you will begin to see some kind of consensus emerge.