Nav Bar Press Room
Nav Bar

Press Release


The Honorable James S. Gilmore, III
Commonwealth of Virginia


Mr. Dean F. Andal
California Board of Equalization

Mr. C. Michael Armstrong
Chairman and CEO,

Mr. Joseph H. Guttentag
Senior Advisor to the Assistant Secretary for Tax Policy
U.S. Department of the Treasury

The Honorable Paul C. Harris Sr. Delegate
Virginia House of Delegates

The Honorable Delna Jones
Washington County, Oregon

The Honorable Ron Kirk
City of Dallas

The Honorable Michael O. Leavitt
State of Utah

Mr. Gene N. Lebrun
President (1997-1999)
National Conference of Commissioners on Uniform State Laws

The Honorable Gary Locke
State of Washington

Mr. Grover Norquist
Americans for Tax Reform

Mr. Robert Novick
General Counsel
U.S. Trade Representative

Mr. Richard Parsons
Time Warner, Inc.

Mr. Andrew Pincus
General Counsel
U.S. Department of Commerce

Mr. Robert Pittman
President & Chief Operating Officer
America Online

Mr. David Pottruck
President & co-Chief Executive Officer
Charles Schwab and Company

Mr. John W. Sidgmore
Vice Chairman
MCI WorldCom and Chairman UUNET

Mr. Stanley Sokul
Independent Consultant
Association for Interactive Media

Mr. Theodore Waitt
Gateway, Inc.

For Immediate Release
May 25, 2000
Press Contacts:
Debbie Neville
O'Keeffe & Company, Inc.
(703) 883-9000, ext. 104

Heather Rosenker
Executive Director
Advisory Commission on Electronic Commerce
(703) 993-8049

Mark Miner
Press Secretary
Office of the Governor of Virginia
(804) 692-3110

House Approves Another E-Commerce Commission Policy Proposal
- House Repeals 102-Year Old Telephone Tax -

Arlington, VA - May 25, 2000 - Congress continued acting on the Advisory Commission on Electronic Commerce's Report today as the House of Representatives voted 420 to 2 to repeal the three percent Federal telephone tax. "This vote marks yet another victory for the Commission and American taxpayers," said Virginia Governor, James S. Gilmore, III, the Commission's Chairman. "The federal telephone tax is one of the most regressive taxes in America. All Americans need a telephone in the Information Economy and this tax impedes growth of the Internet. I am happy to see the telephone tax die."

HR 3916 was sponsored by Representatives Rob Portman (R-OH) and Robert Matsui (D-CA). The bill would phase out the Federal communications excise tax over the next two years, completing in October of 2002. The three percent tax appears on each consumer's monthly telephone bill and applies to all local and long-distance telephone service, including the use of phone lines to access the Internet. The tax was first levied in 1898 as a luxury tax on the few Americans who owned telephones in order to fund the Spanish American War.

The Commission's Report to Congress, submitted April 12 of this year, called on Congress to abolish the tax completely in order to:

  • Relieve tax burdens on Internet connections;
  • Reduce the cost of Internet access; and
  • Help bridge the digital divide.

The Commission was created 20 months ago by the Internet Tax Freedom Act and concluded its work by forwarding its Report to Congress in April 2000.

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 was 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 were provided to Congress on April 12, 2000, ahead of the deadline of April 21, 2000.

3401 North Fairfax Drive
Telephone: (703) 993-8049 · Facsimile: (703) 993-8250

The Commission | Press Room | Calendar/Meetings | Library
Home | Site Map | FAQs | Links