NEW YORK-During a special conference call March 30, a majority of federal Advisory Commission on Electronic Commerce members approved a final report to deliver to Congress April 12.
The commission’s recommendations will include repeal of the 3-percent federal excise tax on telecommunications, originally levied in 1898 to finance the Spanish-American War.
The repeal of this tax is also the subject of legislation in Congress. On the same day as the conference call, Sen. William V. Roth Jr. (R-Del.), the chairman of the Finance Committee, and five other senators introduced legislation that would repeal the tax.
The Cellular Telecommunications Industry Association, which for years has been pressing for a repeal, praised the move.
“With the leadership of Chairman Roth and bipartisan support from so many senior members of the Senate Finance Committee, there is now hope that American consumers can finally get a break from the three-percent Tax on Talking,” said CTIA President Thomas E. Wheeler.
The advisory body also recommended simplification of state and local telecommunications taxes and an end to discriminatory taxation of capital equipment and other real property owned by telecommunications carriers.
On the issue of state sales taxes on purchases made over the Internet, the commission advised Congress to apply a clear set of guidelines similar to those now in effect for conventional mail-order shopping. Specifically, it asked Congress to establish standards for determination of an online vendor’s “physical presence” within the state to which it will deliver goods or services.
That physical presence would be the trigger for the vendor to collect state sales taxes from the buyer and turn them over to the state.
Among its other proposals for Congressional action, the commission suggested a permanent ban on taxation of Internet access and strong safeguards for consumer privacy during online transactions.
RCR Washington Reporter Heather Forsgren Weaver contributed to this report.
