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ACEC Reaches 11th Hour Consensus

Mike Godfrey, Tax-news.com, Washington

22 March 2000

After a day locked in a downtown Dallas hotel, the 19 members of the Advisory Commission on Electronic Commerce finally and against all expectation reached a majority position, weighted much more towards the business proposal made on Monday than earlier seemed possible.

A press release issued this morning said that the Commission voted to:

Reduce consumers' taxation burden by repealing the federal three-percent
excise tax on telecommunications services
Forge a meaningful pathway to simplification of states' sales and use
taxation systems
Permanently prohibit states or localities from taxing Internet access
subscription charges
Extend the current Internet Taxation moratorium legislated by the Congress
on multiple and discriminatory taxation

In addition, the Commission voted to clarify nexus standards that impact
the obligation of businesses to collect and remit state and local taxes on
remote transactions. Further, the Commission highlighted the need to
bridge the "Digital Divide" to permit all Americans to participate in the
Internet economy.

Addressing privacy concerns, the Commission noted that any tax
administering system for e-Commerce should be developed in a manner that
minimizes disclosure of consumers' personal information, and should contain
sufficient security to protect that information. The Commission
recommended that the appropriate committees of Congress should explore
privacy issues associated with the collection and administration of taxes
on e-commerce.

"I am pleased that we were able to come to a majority decision on these key
public policy issues," said Virginia Governor and Commission chairman,
James S. Gilmore. "The Commission's final report will provide an
invaluable resource to the Congress as it deliberates key Internet
questions. These issues will have a profound impact on every citizen of
our country. Along with my fellow Commissioners, I am grateful to have had
the opportunity to serve on this distinguished panel."

The Commission also voted to afford each Commissioner the opportunity to
submit their distinct views on e-Commerce taxation issues. These inputs
will be incorporated in the Commission's final report to Congress.

For more information about the meeting and the Commission, the public may
visit the Commission's Web site at http://www.ecommercecommission.org.

About the Advisory Commission on Electronic Commerce

Appointed by Congress in October 1998 as part of the Internet Tax Freedom
Act, the 19-member Commission has been tasked with studying the impact of
federal, state, local, and international taxation and tariffs on
transactions using the Internet and Internet access. The Commission's
recommendations are due to Congress no later than April 21, 2000.

See related article:

http://www.nytimes.com/library/tech/00/03/biztech/articles/22tax.html

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