Results in Doubt for E-Commerce Commission

REDWOOD SHORES, CALIF. (03/07/2000) - It's unlikely that the Advisory Commission on Electronic Commerce, set up by the U.S. Congress to make recommendations on whether to extend a moratorium on Internet sales taxes, will be able to agree on a proposal by its April deadline, a key commission member said today.

"It's unclear whether or not the commission will come up with a delineating document," Utah Governor Michael Leavitt said here today in an interview after a conference on e-government at Oracle Corp. headquarters. "It's possible, but not likely," he added.

The 19-member commission has been deeply divided on the issue of taxing Internet sales since its formation in 1998 when Congress set a three-year moratorium on Net taxation.

Leavitt, who is also the chairman of the National Association of Governors, said there is not yet a national consensus on Internet tax policy. "The debate is not quite ripe yet," he said.

Along with a majority of U.S. governors, Leavitt has argued that Internet taxation is necessary because the decline in sales from traditional "brick-and-mortar" companies as they lose out to their Net counterparts could leave U.S. states strapped for cash.

"I'm for a level playing field," he said. "Are we going to create a permanent exception for one group (of e-commerce companies) and tell them they won't have to pay for our schools, our roads and our justice system?"

The chairman of the 19-member commission, Virginia Governor James Gilmore, has opposed Internet sales taxes and has broached the idea of a permanent ban on online sales taxes.

Leavitt said four out of five U.S. governors advocate some form of Internet sales tax. One notable exception is California Governor Gray Davis who has said the Internet is creating more wealth for his state without the imposition of a Net tax.

Over the next two years, giant retailers like Wal-Mart Stores Inc. will push Congress for a sales tax policy that treats all businesses equally, Leavitt said. "The major retailers are just beginning to realize how unfair (the Internet sales tax moratorium) is to them," he added.

More information on the Advisory Commission on Electronic Commerce can be found at http://www.ecommercecommission.org/.

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