President Clinton Says He Won't Rule Out Online Sales Tax

White House Press Release

14 February 2000

In the live interview with CNN's Wolf Blitzer, based mostly on questions submitted via email, Clinton said state governors were working on a solution to the problem.

"I don't think we should have access taxes on the Internet or any other kind of discriminatory taxes because this is an important part of our economy and we want it to grow.

Q Doesn't that discriminate, though, against stores -- a bookstore, for example -- THE PRESIDENT: Of course it does -- Q -- that you have to pay tax -- THE PRESIDENT: Absolutely, it does -- Q -- but if you go to Amazon.com you don't have to pay taxes? THE PRESIDENT: It does, and that's the argument that the governors are making and the argument a lot of the merchants are making. Q Well, where's your position on that?

THE PRESIDENT: Well, what I'm trying to do is get them together. There are also -- the Internet people point out that there are also a lot of complications in the way state taxes are. And they have on their side the weight of Supreme Court law which basically was made from mail-order sales. The same argument was made against mail-order sales. And the prevailing legal position is that if you don't have enough connections to a state, you don't have the obligation to collect and remit the sales tax. Keep in mind, the sales taxes do, it's just that the seller doesn't have to collect and remit it.

"So most of the people I know who have Internet businesses are concerned about trying to make sure they get a simplified system and they know what the drill is. Their main concern, however, is not having access to the Internet itself taxed. And I'm with them on that. And I'm trying to support the process that now exists to resolve the issue of how state taxes, the sales taxes, can best be collected in the way that's not too burdensome on the Internet.

"You don't want to burden the Internet, but you don't want to put people who aren't making sales on it out of business. And we've got to find that right balance and that's what we're working on," he said.

Blitzer also asked the President about recent attacks on major .com sites. Could the authorities do anything about it? The PRESIDENT: "Well, the short answer to that is, we probably can. And I'm bringing in a group of people to meet with me tomorrow, a lot of people from the high-tech community and from all our government agencies. These denial-of-service attacks are obviously very disturbing and I think there is a way that we can clearly promote security. I think it's important that the American people not overreact to this."

Download the full text of the CNN interview with Clinton in a White House Press Release

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