Advisory Commission on Electronic Commerce
Invites Interested Parties to Submit Plans

Arlington, VA - October 15, 1999 - The Advisory Commission on Electronic Commerce today issued an invitation to the public to submit proposals by November 15, 1999, regarding possible taxation of electronic commerce transactions. The Commission is 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 request for submissions covering the feasibility of adapting sales tax systems to Internet-based transactions should not be interpreted as a decision to adopt a plan to implement taxation of Internet-based transactions.

At its New York City meeting last month, the Commission discussed, and later supplemented, a set of criteria that will be used in the evaluation of the proposals. The Commission's Report Drafting Subcommittee will review proposals and has the option of incorporating proposals into its Issues and Policy Options paper to be presented at the Commission's next meeting in San Francisco on December 14-15, 1999.

Commission members specified the following criteria for those interested in submitting plans:

Simplification

1. How does this proposal fundamentally simplify the existing system of sales tax collection (Some examples may be: common definitions, single rate per state, clarification of nexus standards, and so forth)?
   
   
2. How does this proposal define, distinguish, and propose to tax information, digital goods, and services provided electronically over the Internet?
   
   
3. How does this proposal protect against onerous and/or multiple audits?

Taxation

4. Does this proposal impose any taxes on Internet access or new taxes on Internet sales?
   
   
5. Does this proposal leave the net tax burden on consumers unchanged? (Does it impose an obligation to pay taxes where such an obligation does not exist today? Does it reduce or increase state and local telecommunication taxes? Does it reduce or increase taxes, licensing fees, or other charges on services designed or used for access to or use of the Internet?)
   
   
6. Does the proposal impose any tax, licensing or reporting requirement, collection obligation or other obligation or fee on parties other than those with a physical presence in a particular state or political subdivision?
   
   
7. What features of the proposal will impact the revenue base of federal, state, and local governments?

Burden on Sellers

8. Does this proposal remove the financial, logistical, and administrative compliance burdens of sales and use tax collections from sellers? Does the proposal include any special provisions with respect to small, medium-sized, or start-up businesses?

Discrimination

9. Does the proposal treat purchasers of like products or services in as like a manner as possible through the implementation of a policy or system that does not discriminate on the basis of how people buy?
   
   
10. 10.Does the proposal discriminate against out-of-state or remote vendors or among different categories of such vendors?

International

11. How does this proposal affect U.S. global competitiveness and the ability of U.S. businesses to compete in a global marketplace?
    
    
12. Can this proposal be scaled to the international level?
    
    
13. How does this proposal conform to international tax systems, including those that are based on source rather than destination? Is this proposal harmonized with the tax systems of America’s trading partners?

Technology

14. Is the proposal technologically feasible utilizing widely available software to enable tax collection? If so, what are the initial costs and the costs for required updates, and who is to bear those costs?

Privacy

15. Does the proposal protect the privacy of purchasers?

Sovereignty/Local Government Autonomy

16. Does this proposal respect the sovereignty of states and Native Americans?
    
    
17. How does this proposal treat local governments’ autonomy and their ability to raise a greater or lesser amount of revenues depending on the needs and desires of their citizens?

Constitutional

18. Is the proposal constitutional?

Submissions should follow the Federal Register Notice guidelines below:

Proposals should be no longer than eight pages, single-spaced.

Send thirty (30) hard copies of all written comments to the address below.

Send one version of written comments electronically to:

comments@ecommercecommission.org.

In addition, electronic copies of submissions must be sent on a 3.5 inch computer disc or CD-ROM in Microsoft Word, Excel, or PowerPoint format.

Interested parties should send submissions to:

Advisory Commission on Electronic Commerce
3401 North Fairfax Drive
Arlington, VA 22201-4498

The Commission may request that selected proposals be formally presented at the Commission's meeting in San Francisco. Interested parties should consult the Federal Register notice (64 FR 55894-55895), published October 15, 1999, or visit the Commission's Web page listed below for additional details concerning the Commission's invitation for proposals.

In addition to the above, interested parties are reminded of the general invitation to provide comments in writing to the Commission. Written comments should be provided in accordance with guidelines published in the Federal Register on August 13, 1999 (64 FR 44183). Comments of a brief nature may be addressed to the Commission through its Web site at www.ecommercecommission.org.

Records shall be kept of all Commission proceedings and shall be available for public inspection given adequate notice at the Commission's offices at 3401 North Fairfax Dr., Arlington, Virginia 22201-4498. In addition, records of meetings including agendas, transcripts and minutes are posted as soon as available on the Commission's Web site.

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.