E-commerce taxation report on to Congress

The controversial committee studying Internet taxation on Thursday approved

its final report to be sent Congress, recommending severe limits on Internet

taxation. However, complaints continue to surface from committee members

who say the process did not follow the congressional mandate.

Two-thirds of the Advisory Commission on Electronic Commerce agreed

that Congress must address Internet consumer privacy and the digital divide

between those who have Internet access and those who do not.

But the commission could not garner a two-thirds vote — mandated by

Congress to make official recommendations — on the crucial Internet taxation

issues. Instead, the commission released a "majority view" report with recommendations — despite opposition by several state and local members.

Those recommendations are to:

* Extend the moratorium on new and discriminatory taxes on the Internet

for five more years, until 2006.

* Ban Internet access taxes.

* Prohibit sales taxes on Internet goods and services for American consumers.

* Ban sales taxes on the sale of digital goods and services.

* Eliminate the federal telephone tax.

Utah Gov. Michael Leavitt, Washington Gov. Gary Locke, Washington County,

Ore., commissioner Delna Jones, Dallas mayor Ron Kirk and National Conference

of Commissioners on Uniform State Laws president Gene Lebrun joined released

a statement together o make it clear they oppose the report.

"Both the report, and the process which fostered it, are seriously flawed.

Rather than make constructive use of the opportunity presented by the creation

of the ACEC, the commission's process allowed posturing and political rhetoric

to take precedence over policy, and special interests to supersede broader

national interests and the common good," the statement said.

The report will be submitted to Congress before April 21.