Continued US ban on new Internet taxes is favored

Unitd States industry trade groups Friday came out in favor of new Internet tax bills aimed at banning for another five years any new taxes on online access.

The two pieces of legislation, introduced by Rep. Chris Cox and Sen. Ron Wyden, also direct states to begin tackling the complexity of their differing sales tax systems -- a sticking point so far in Internet tax debates.

The Internet tax moratorium in place now is due to run out in October.

Lawmakers have been expected to extend the ban on Internet tax and even to put limits on discriminatory taxes on e-commerce, which both bills do. On the other hand, lawmakers were thought to be steering clear of the vexing issue of local jurisdictions' ability to demand that businesses collect taxes on sales across state lines.

But the new bills include measures that lay out a sales tax simplification plan that would be suitable to Congress.

State government groups recently scaled back an effort to streamline and standardize sales tax collection across the multitude of states with such a tax.

Harris Miller, president of Virginia-based Information Technology Association of America (ITAA), which came out in favor of the bills, said, "The issue is in part about fairness, and in part about guaranteeing that taxing jurisdictions do not plunder interstate electronic commerce for their own benefit."

Washington-based AeA, formerly the American Electronics Association, also sent letters to lawmakers in favor of the legislation.

"We applaud your efforts to keep the Internet free of the complex burdens imposed by the current US sales and use tax administration system," said AeA president William Archery in the letter.

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