US President Continues Opposition To Internet Tax

by Mike Godfrey, Tax-news.com, Washington

10 May 2001

President Bush is maintaining his stance against the imposition of an Internet tax by calling for the extension of the moratorium on taxing goods bought over the Internet. The ban is set to expire in October and the Senate Commerce Committee is currently working on legislation that could extend the federal prohibition on the tax by as much as five years. At a White House press briefing this week, spokesman Ari Fleischer said the president 'favors an extension of the moratorium on Internet taxation' and the administration aims to 'continue to work with the Congress for the exact duration of it.'

The president made clear his position at an Electronic Industries Alliance government industry dinner this week when he stated: 'We need to ban Internet access taxes. We need to understand how powerful the Internet can be to commerce and growth ... it's important to create certainty. It's important for planners and corporate executives to understand the rules, and that the rules won't change. It's important for Congress to understand that tax relief provides consumer confidence. Long-term, steady tax policy is necessary to encourage deployment of capital throughout our society.'

He also called for the temporary tax credit encouraging businesses to invest in research and development to be made permanent. It is set to expire in 2004 and there is much concern that this has led some businesses to limit their R&D funding.

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