March 15, 2001 Senate Commerce Committee Hears Call for E-Fairness In a two and a half hour hearing before the Senate Commerce, Science, and Transportation Committee, witnesses testified that an uneven playing field between Internet and bricks-and-mortar retailers could leave states scrambling to collect the sales tax revenue necessary for essential services. Citing estimates that five to 10 percent of retail sales could be transacted on the Internet in the next five years, Wyoming Governor Jim Geringer said, "This is not about taxing the Internet. This is about whether our states and cities can collect already authorized taxes," adding "we just want some fairness here." The hearing focused on whether to extend the Internet Tax Freedom Act, which is set to expire on October 21, 2001. The act prohibits new Internet access taxes, as well as "multiple or discriminatory taxes" on electronic commerce. Currently, a number of states are working to craft a plan to simplify their tax codes to facilitate future collection of sales tax on Internet and catalog sales. Commerce Committee members have introduced two different Internet tax bills. Senator Byron L. Dorgan (D-ND) is sponsoring the Internet Tax and Moratorium Equity Act, which would extend the current moratorium until December 31, 2005. The bill proposes cooperation similar to that outlined by the states, and would authorize states to enter into an interstate compact wherein they would adopt a unified sales tax system, as reported by Bloomberg. The bill is co-sponsored with, among others, Senators George V. Voinovich (R-OH) and Mike Enzi (R-WY). Among the materials considered by the committee was a March 5 letter from the 61 members of the E-Fairness Coalition, which offered a detailed analysis of the issues surrounding Internet taxation policies. ABA and several regional booksellers associations are members of E-Fairness. The letter and testimony by Peter Lowy, founding chairperson of the E-Fairness Coalition, supported proposals similar to the Dorgan bill. Also before the committee is a bill from Senator Ron Wyden (D-OR). It would also extend the moratorium, while mandating more specifically how states should simplify their laws, as reported by Bloomberg. The National Governors Association opposes the Wyden bill. At the hearing, committee chairperson Senator John McCain (R-AZ) expressed doubts that states were facing a revenue shortfall. "Personally, I have not seen evidence of the sales tax revenue losses predicted by the states and local governments when we took up this issue a few years ago," he noted. However, he also added that "even so, Main Street retailers have a legitimate fairness argument." According to published reports, McCain hopes to reach a compromise on the issue. -Dan Cullen Topics: Internet Commerce, Fair Trade Practices, Sales Tax Initiative, News - Bookselling,