E-Fairness Supporters Praise Senate's Move Towards Tax Equity For All Retailers

by Mike Godfrey, Tax-news.com, Washington

24 May 2001

At the beginning of this week, the US Senate voted 88-11 to oppose an amendment put forward by Senator Bob Smith (R-NH), which would have permanently extended the current moratorium on Internet access. The move has been welcomed by "bricks and mortar" retailers and other interested parties, who praised the Senate for supporting "a level playing field for all businesses and consumers"

The e-Fairness Coalition, for one, said it congratulated the Senate because the Smith Amendment would have permanently extended the moratorium without resolving the larger issue of the collection of sales and use taxes on remote sales.

e-Fairness Coalition Executive Director, Lisa Cowell, commented in a statement: 'This vote was clearly a blow to those who would create a special tax-free haven for a particular segment of the economy. We cannot have two different sets of tax rules - one for those who conduct their business via the Internet and one for those who do business over the counter. It is clear.....88 Senators believe in tax equity.'

Cowell continued: 'For more than 18 months we have been working with Congressional leaders from both parties to resolve the issues surrounding Internet taxation in a fair and comprehensive manner. Last night's (Monday's) victory was a giant step in the right direction and for that we would especially like to thank Senators Mike Enzi (R-WY), Byron Dorgan (D-ND), Kay Bailey Hutchison (R-TX) and Bob Graham (D-FL) for their courageous leadership. We look forward to completing this process along with them and others in the Senate including Commerce Committee Chairman Senator John McCain (R-AZ) who has been leading negotiations on a compromise bill. Under their guidance, we will achieve tax equity.'

The e-Fairness Coalition, which represents over 1.5 million "bricks and mortar" and online retailers, retail associations and publicly- and privately-owned shopping centres, has campaigned for some time for compromise legislation to create a climate where Internet-based retailers and those with a physical location can co-exist and compete on even terms. Cowell said: 'The Senate has a blueprint for equity within its grasp. The time is now for the Senate Commerce Committee to bring the compromise up for a vote and close the Internet tax loophole. It's good for competition, it's good for consumers and it's good for our economy.'

The e-Fairness Coalition is not alone in celebrating this week's rejection by the Senate of the Smith Amendment. America's National Association of Real Estate Investment Trusts also praised the move, its President and Chief Executive, Steven A Wechsler, saying: 'Whether you support or oppose the idea of a sales tax, once such a tax has been imposed it must be applied equally. There is absolutely no rationale for the government to use the tax code to favor on-line retailers over on-site sales.'

He continued: 'NAREIT's E-Fairness Task Force congratulates the Senate for its demonstration of support for a level playing field for all retailers, and encourages members of the Senate Commerce Committee to move forward with a compromise approach based on S. 512.'

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