WASHINGTON-A spokesman for a lawmaker at the center of the Internet tax debate said a front-page USA Today story last week that reported a compromise had been reached was incorrect, but he expressed optimism that a bill will be passed before the moratorium on electronic commerce taxes ends this October.
“They continue to make progress. They have not resolved all the issues,” said Barry Piatt, press secretary for Sen. Byron Dorgan (R-N.D.).
The Dorgan bill would extend the Internet tax moratorium for five years, during which time cities and states would develop a system to streamline sales and use taxes for e-commerce Today, with 7,500 taxing jurisdictions in the United States, local and state taxes on Internet sales largely go uncollected.
The tax issue will take on greater significance for the wireless industry in coming years as cell phone and paging operators try to exploit mobile commerce opportunities. The issue is especially important for states and local communities, which rely on sales taxes for a big chunk of their revenue.
Piatt said the Dorgan bill does not create any new taxes but it would ban discriminatory taxes and Internet access fees.
New Senate Commerce Committee Chairman Ernest Hollings (D-S.C.), according to Piatt, will support the Dorgan bill and plans to move the legislation swiftly once a bipartisan deal is struck.
Lane McIntosh, director of federal public policy for Amazon.com, said he hopes the bill that emerges makes room for a third-party-such as the Congressional Budget Office or the Office of Management and Budget-to review Internet tax simplification guidelines crafted by states before a final bill is submitted to Congress for a vote.
Piatt said a competing bill championed by Sen. Ron Wyden-which would extend the Internet tax moratorium indefinitely-was recently defeated when Sen. Bob Smith (R-N.H.) attempted to attach it to another bill considered by the Senate.
In addition to Dorgan and Wyden, other key lawmakers trying to fashion an Internet tax bill this year are Sens. John McCain (R-Ariz.), John Kerrey (D-Mass.) and Michael Enzi (R-Wyo.)
