SAN ANTONIO, TX — Warning of the dangers of imposing taxes on the Internet, the Texas Public Policy Foundation today joined with more than 20 consumer, taxpayer, and public policy organizations in presenting a plan to keep new tax collection schemes off the Internet, and tear down barriers to access.
The “e-Freedom Coalition,” which includes TPPF, unveiled its plan at a Washington news conference with House Budget Committee Chairman John Kasich, who pledged to introduce legislation to make some of the Coalition’s recommendations law.
Jeff Judson, president of the San Antonio-based think tank, said “the Internet is bringing extraordinary information into the homes and offices of ordinary Texans. Recent proposals to levy taxes on ‘e-Commerce’ or Internet access will not only put this information out of reach for some, but also jeopardizes America’s economic growth.” Some studies show that up to 30% of the growth in America’s economic output can be attributed to high-tech, with the Internet at its core.
Specifically, the group proposes a permanent ban on sales and use taxes that specifically apply to online commerce, setting clear rules to ensure that only those companies with a physical presence in a state can be compelled to collect sales taxes, and tearing down government-imposed taxes and rules that drive up the cost of Internet access. The federal 3% excise tax on telephone service would be immediately relegated to the ash heap if Congress decides to accept the group’s proposal. State and local practices of taxing telecommunications properties at higher rates than other commercial properties would also be terminated, along with any attempt to specifically tax Internet access (the usually $19.95 per month consumers pay their Internet Service Provider for dial-up and other access).
The plan, available online at www.e-freedom.org, takes the form of a proposal to the federal Advisory Commission on Electronic Commerce. Congress created the temporary panel to study tax issues presented by the growth of the Internet and online commerce, and report its findings back to Congress next year. The Commission will hold its second to last meeting in San Francisco next month. More information on the Commission is available online at www.ecommercecommission.org.
Judson urged all Texans to make their known their opposition to new tax collection schemes on the Internet by sending a comment to the Commission at [email protected].
Look for an opinion editorial from the Texas Public Policy Foundation to be released in the near future by the e-Freedom Coalition.