E-Commerce Commission Submits Report To Congress
Chairman Presents Report at Formal Ceremony

Arlington, VA - April 12, 2000 - In accordance with its statute, The Advisory Commission on Electronic Commerce today submitted its report on Internet tax issues to Congress. This morning, Commission Chairman Virginia Governor James S. Gilmore, III presented the report in a formal ceremony to Speaker of the House Dennis Hastert, Senate Majority Leader Trent Lott, and House Majority Leader Dick Armey at the United States Capitol. Advisory Commission members Paul Harris, Stan Sokul, and Grover Norquist, as well as Congressman Robert Goodlatte (R-VA) and Senator John Warner (R-VA) were on hand at the Capitol with the Chairman. Governor Gilmore followed up on his formal presentation with an address to a Newsmaker Luncheon at the National Press Club.

"In the Internet economy, it is unfair to make small mom-and-pop businesses collect taxes on the Internet," said Governor Gilmore. "Under the current arcane system of sales taxes, the business initiative that founded our nation would wither in a blizzard of paperwork and bureaucracy. Let it be known that the Commission has weighed in heavily on the side of low tax burdens, fairness, and equal opportunity for all Americans."

Over the past several days, Congressional members have demonstrated support for the Commission's report by introducing legislation that extends the current moratorium on Internet-related taxes, abolishes all taxes on Internet access, and clarifies nexus standards. For example, Senator Judd Gregg (R-NH) and Senator Herb Kohl (D-WI) introduced legislation that would prevent states from forcing out-of-state businesses, which have no physical connection to the state, to collect sales taxes on their behalf. Minority Leader Richard Gephardt also recently announced his support for several ideas endorsed in the report.

"We are pleased to receive the majority report from the Advisory Commission on Electronic Commerce," said House Speaker Dennis Hastert (R-IL). "Congress is already planning to act on the recommendations that Governor Gilmore and his commissioners agreed upon. For example, Congress will soon vote to extend the moratorium on Internet taxes for another five years."

"The report today emphasizes value to the people of the United States - the working men and women who actually pay the taxes," Governor Gilmore continued. "It's a comprehensive proposal that I'm very proud of, and I think it's very upbeat and uplifting."

The Commission returned a two-thirds majority vote stressing that the Congress act to address the following issues:

• Need to bridge the "Digital Divide" to permit all Americans to participate in the Internet economy;
• Protect consumer privacy on the Internet; and
• Making permanent a standstill on international tariffs on electronic commerce at the earliest possible date.

The report also details majority positions in key areas, including:

• Reduce consumers' tax burden by repealing the Federal three-percent tax on telephone services, in effect since 1898, a tax cut of $5 billion annually for American consumers;
• Forge a meaningful pathway to simplification of states' sales and use tax systems;
• Permanently prohibit states or localities from taxing Internet access charges, thus saving taxpayers money;
• Extend the current Internet tax moratorium legislated by the Congress on multiple and discriminatory taxation targeted at the Internet; and
• Clarify nexus standards to make fair the obligation of businesses to collect and remit state and local taxes on remote transactions over the Internet.

For more information about the Commission and its meetings, 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.