| BUSINESSWEEK ONLINE : MARCH 1, 1999 ISSUE | ||||||||
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| WASHINGTON OUTLOOK
Internet Taxes Last October, Congress passed legislation that was supposed to resolve the vexing issue of how to tax Internet sales. With E-commerce sizzling, the timing looked perfect. The measure imposed a three-year moratorium on Net taxes and set up a blue-ribbon commission to devise a new tax system for both electronic and mail-order sales. The panel--which includes AT&T Chairman C. Michael Armstrong and Netscape CEO James L. Barksdale--was given 18 months to draft a plan. But four months later, the group has not met. It has no staff and no chairman. A spat over its makeup may force Congress to rewrite the law. Worse, in this poisonous atmosphere, the group may never resolve the issues it faces--even if squabbles over its makeup are settled. ''This is just a disaster,'' says Donald M. Griswold, a tax partner at accountants KPMG. The panel's work is critical to state and local tax collectors, who project they'll lose $10 billion a year by 2002 as E-commerce booms. It's also important to online sellers, who want a uniform tax system in all 50 states. House and Senate leaders were supposed to pick eight state and local reps and eight representing E-commerce, consumers, and Main Street retailers. They goofed and chose nine from industry and seven from local government. No business member will quit and no Hill leader will withdraw his choice. A mediation attempt by Vice-President Al Gore has failed so far. The only other solution is to add members. But state and local officials feel the panel still will be stacked against them. ''The appointments are so biased, we may be better off having this whole effort collapse,'' says National League of Cities lobbyist Frank Shafroth. He may get his wish. EDITED BY PAULA DWYER By Howard Gleckman _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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