Congress on Thursday chose not to extend a 1998 ban on taxes that target the Internet, meaning that, theoretically, state and local governments could begin imposing Internet taxes on Monday.
October 19, 2001 12:09 PM   Subscribe

Congress on Thursday chose not to extend a 1998 ban on taxes that target the Internet, meaning that, theoretically, state and local governments could begin imposing Internet taxes on Monday. Wow, we've been watching over our shoulders for terrorist and congress slips us a fast one!
posted by Sal Amander (5 comments total)
 
The very next sentence of that story: "That's not considered likely. The ban will likely be reinstated later, and was only prevented from passing now because of a complex debate about how to handle the lost state-tax revenue."

BTW, only three or four state legislatures are even in session this time of year.
posted by aaron at 12:19 PM on October 19, 2001



If this tax is enabled it will further drive a stake into the heart of e-commerce. And the reasoning is stupid. If I buy online from a store and they have a brick and mortar store in my state, I pay state taxes on that item for an online transaction. If the company doesn't have a store in my state, I don't pay taxes. But for every person who doesn't owe tax in one state there is bound to be one who does, and vice versa. And if they tax such things for e-commerce then logically they should charge taxes for people who place a catalog order--which is not taxed either. The article mentions this. Also, if one state applies a tax to e-commerce, but another doesn't then why wouldn't the companies consider leaving the state that imposes taxes for another that doesn't? I hope legislators really think this out, but that is probably an oxymoron.

If I were Eddie Bauer, j.crew, Speigel, L.L. Bean or any of the many other catalogue companies I would have my lobbyist pounding on Congress' door ASAP :) The article says that state legislatures are looking for ways to get at the approximately US$26 Billion in lost taxes, but are they so stupid that don't realize that if people are forced to pay taxes on catalogue sales and Internet sales they may decided to not use either?

I do nearly all of my shopping--with the exception of groceries and some other items--online. The last 2 gift-giving holiday consumer seasons I did all of my shopping online. If I would have to pay taxes *and* shipping, I wouldn't bother and would simply stop buying those items or shop closer to home, and therefore less often because I hate stores :) And I doubt I am the only one.
posted by terrapin at 12:35 PM on October 19, 2001


Internet tax is not going to happen for at LEAST a few years. It's not like we don't have enough alarmists beating their drums, so just RELAX. It's Friday.
posted by skechada at 12:44 PM on October 19, 2001


so just RELAX. It's Friday

Yeah, but now it's Friday with Anthrax!
posted by Sal Amander at 2:06 PM on October 19, 2001


page 3 of this PDF document indicates that the House voted for a two-year extension for this moratorium on 16-Oct-2001. but i couldn't find a record of the vote as passed(or even voted upon).
posted by donkeysuck at 3:53 PM on October 19, 2001


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