Well, we appear to be making some progress. The retailers are now speaking up about the impact of remote web sales and mail order on them. And Gov. Gilmore is attempting to respond.... -- Brian Moura >> "We're a little bit discouraged that since he's the chair of the commission, he's taken a position [on Internet taxation] without hearing from the retailiers, who will be the hardest-hit group," said Lisa Gilbertson, director of tax and financial issues for the International Mass Retail Association, an Arlington, Va.-based trade organization. "He says it's a level playing field for all Internet businesses, but we think it's giving preferential treatment to goods sold over the Internet. We would like a level playing field for all commerce, whether it's a bricks-and-mortar store or remote sales. We think [Gilmore's plan] is skewed economic policy." Gilbertson also said by removing from states the ability to tax, Gilmore's plan appears to be unconstitutional. << ACEC Chairman Speaks Mind On E-Commerce Taxation By Doug Brown <http://www.zdnet.com/intweek/filter/edit> , Inter@ctive Week November 16, 1999 10:58 AM ET http://www.zdnet.com/intweek/stories/news/0,4164,2395069,00.html <http://www.zdnet.com/intweek/stories/news/0,4164,2395069,00.html> The chairman of a potentially influential commission set up to explore issues surrounding the idea of taxing e-commerce laid out in detail Monday night a plan that would ban all online sales taxes but replace tax revenue lost to states with a tax on telecommunications. Virginia Gov. Jim Gilmore, chairman of the federal Advisory Commission on Electronic Commerce (ACEC), extolled the Internet and e-commerce in his keynote speech at a forum on e-commerce and Internet regulation - describing the Internet as revolutionary and as a vehicle for freedom and liberation, and at one point comparing the notion of taxing the Internet with the Berlin Wall. "America," he said, "should not now construct an Internet curtain" with new taxes. Gilmore's plan would place a categorical ban on all forms of e-commerce taxation. It would also eliminate a 3 percent federal tax on telecommunications or phone lines. But telecommunications would still be taxed under his plan. He called on Congress to draft legislation that would levy a 1 percent tax on telecommunications that would be sent back to states. He also said Congress should draft legislation that would let states use surplus state welfare money to buy computers and pay for Internet access for poor families. Gilmore faces a battle within the commission over the taxation issue. The 19-member commission, comprising three governors, heads of several major information technology corporations, and government and business leaders from around the country, is tasked with presenting to Congress a report next year with recommendations for how to handle the issue of Internet taxation. Gilmore ran as a staunch foe of taxes in general in his gubernatorial bid two years ago. But some other members of the commission aren't as ideologically opposed to taxes as Gilmore. Several of the members have already released plans for Internet taxation, which are available on the organization's Web site at www.ecommercecommission.org. For any proposal to be submitted to Congress, it must be agreed upon by a two-thirds majority of the commission. The group has two more meetings - one in December in San Francisco and the last meeting next year in Dallas - before voting upon a final report. In addition to opposition to his plan from within the commission, Gilmore will battle with the nation's retailers, a group with deep pockets - think Wal-Mart Stores, Sears Roebuck, Bloomingdales, and HomeDepot - and, under the guise of the small-town shopkeeper, a purchase on the nation's heartstrings. "We're a little bit discouraged that since he's the chair of the commission, he's taken a position [on Internet taxation] without hearing from the retailiers, who will be the hardest-hit group," said Lisa Gilbertson, director of tax and financial issues for the International Mass Retail Association, an Arlington, Va.-based trade organization. "He says it's a level playing field for all Internet businesses, but we think it's giving preferential treatment to goods sold over the Internet. We would like a level playing field for all commerce, whether it's a bricks-and-mortar store or remote sales. We think [Gilmore's plan] is skewed economic policy." Gilbertson also said by removing from states the ability to tax, Gilmore's plan appears to be unconstitutional. For Gilmore's part, he said after the speech that he has every right to announce his position on Internet taxation, despite his potentially influential position as chairman of the commission. He acknowledged that there will be disagreement within the commission but said he would be unwilling to support any proposal that adds any taxation to the Internet. "I don't think that a middle ground is in the best interest of the people of the United States," Gilmore said.
