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WASHINGTON -- Several lawmakers said Monday they would seek to place a permanent ban on Internet access taxes, hoping to side step the more controversial question of whether Internet sales should be taxed.
Democratic Sen. Ron Wyden and Rep. Chris Cox, a Republican, said they would try to make the existing ban permanent before it expires in November, and Republican Rep. Chris Cannon said his committee would start work on the bill this week.
"I think it's important to move this immediately," said Cannon, who chairs the House of Representatives subcommittee on commercial and administrative law.
The moratorium, first passed in 1998, prohibits "multiple and discriminatory" taxes on Internet traffic. That means states, counties or other jurisdictions may not tax Internet access fees or Internet traffic.
It does not address online sales taxes, currently prohibited under a 1992 Supreme Court decision that forbids states from taxing catalog, telephone and other "remote" sales.
Cash-strapped state governments say they will lose an important source of revenue if they are not allowed to tax online sales, while online retailers like Amazon.com say they can not possibly comply with the estimated 7,500 taxing jurisdictions nationwide.
Various studies estimate that Internet sales deprived states of between $2.5 billion and $13.3 billion in sales taxes they would otherwise have collected in 2001. But some retailers like Target and Wal-Mart Stores have begun voluntarily collecting sales taxes from their websites, based on the customers' locations.
States and other advocates of online sales taxes have sought to link passage of a permanent ban on access taxes with a new law giving them the right to impose sales taxes on the Web.
But the three lawmakers sought to put distance between their proposal and the sales-tax issue, saying Congress could consider the two separately.
"We hope (states) will be clear in their purpose, because then there's no way they can hijack this debate," Cannon said. "We want to get this out of the way now."
A spokeswoman for a coalition of "bricks and mortar" retailers that backs online sales taxes said she did not object to making the ban permanent, but that it would not satisfy the concerns of states and retailers.
"We believe that this moratorium does nothing to address the real issue, which is the collection of sales taxes," said Nicole Rowe, spokeswoman for the E-Fairness Coalition.
