July 19, 2001 Congressman Calls for E-Fairness With a key moratorium on new Internet taxes set to expire in October, discussion continued in a U.S. House of Representatives subcommittee last week regarding sales tax and Internet commerce. On July 18, the Commercial and Administrative Law Subcommittee of the House Judiciary Committee held a hearing on legislation that would both extend the current moratorium until December 31, 2005, and resolve the sales and use tax issue by working with state governments to simplify sales tax structures. Among those testifying before the committee was Representative Ernest Jim Istook Jr. (R-OK), sponsor of the "Internet Tax Moratorium and Equity Act." Istook told the committee that "the current moratorium has created problems both because it has been misunderstood and because it has often been misrepresented…. It's the mistaken impression that the moratorium is a prohibition on the ability of states to apply their normal sales tax laws to retail sales that involve the Internet." He noted that simply extending the current moratorium without tax simplification would result in "a major shift of more power to the national government, reducing the power of state and local governments." While characterizing himself as "someone who believes that taxes are too high," Istook criticized those "whose motive is purely to enrich themselves, not principled tax relief" across the board. He noted that "we have all heard the cry! 'Don't tax the Internet!' What a great bumper sticker. Nobody likes taxes. But we understand that taxes pay for roads, police and fire departments, water systems, etc. Those who simply cry, 'Don't Tax the Internet!' fail to tell the rest of the story. Their full motto actually is 'Don't Tax the Internet--Tax Everyone Else Instead!'" Lisa Cowell, executive director of the E-Fairness Coalition, noted that the Istook bill "would best protect the interests of everyone concerned--Main Street retailers, consumers, state and local governments and their citizens, and the Internet community." She added that currently 16 states have enacted simplification legislation and that 26 additional states are "actively studying the issue." Jon W. Abolins, chief tax counsel and vice president for tax and government affairs for Taxware International, testified before the committee that current simplification proposals would make collection of sales taxes for Internet sales "manageable and economically feasible." Speaking against the bill, Grover G. Norquist, president of Americans for Tax Reform, said the legislation would diminish competition and that the loss of tax revenue poses little threat to state budgets. Subcommittee Chair Representative Bob Barr (R-GA) last week said that he would move legislation extending the moratorium before the House's August recess. He would not comment on whether he would support the Istook bill, or legislation that would simply renew the current moratorium without addressing the issue of e-fairness, as reported by Reuters. -Dan Cullen Topics: Sales Tax Initiative, News - Bookselling,