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Janet Roberts

Senate Approves Internet Tax Moratorium
By Janet Roberts



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The other shoe has dropped in the renewed legislative battle over Internet taxation:

The Senate voted Thursday night to extend a two-year moratorium on Internet taxes that had expired on Oct. 21. The voice vote came after the body rejected a controversial amendment to allow states to tax online sales.

The bill now goes to President Bush to be signed into law. The House of Representatives had approved an identical bill in October, and Bush has previously expressed support for the moratorium.

The essence of the legislation is to prevent states from levying special taxes on online access and sales. Congress had approved a three-year moratorium in 1998, which expired last month after the Senate couldn't agree whether to add the controversial sales-tax amendment.

The issue pits state and local governments looking to capture sales tax lost on online sales and local businesses whose sales are taxed against Internet-based businesses and their supporters, who say that the lack of a streamlined tax system could cripple a growing business sector.

For U.S. newsletter publishers whose business includes online sales, this should come as some relief, although the cynical among us will say that it just pushes the battle back a couple of years.

Now is a good time to get to know your congressional representatives, especially if you feel strongly about the issue, and you have some expert knowledge to back it up.

Ezine-Tips for November 16, 2001

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