Rep. Christopher Cox (R-CA) and Sen. Ron Wyden (D-OR), authors of the 1998 Internet Tax Freedom Act, announced yesterday that they will introduce the Internet Non-Discrimination Act this month — a bill to make permanent the temporary moratorium on new, special and discriminatory Internet taxes that was part of the ITFA enacted in October 1998.
Cox and Wyden said the new bill was necessary because they believe online consumers have recently become threatened by new tax proposals — from state and local sales and use taxes to the creation of a new “unified” Federal sales tax — that would be bureaucratic nightmares for millions of Americans, and are of dubious constitutionality.
“You can't squeeze the new economy into policies written for smokestack industries,” said Sen. Wyden. “With [the ITFA], Chris Cox and I put a temporary stop to the reckless, special taxing of the Internet. Now it's time to make that ban on discrimination permanent.”
According to both Congressmen, consumers, businesses, and state and local
governments have thrived under the ITFA and the moratorium it placed against online taxes. They said the moratorium was a boon to traditional retailers, who had one of their best holiday seasons ever — recording a nearly 8 percent jump in sales over last year. In addition, they said the growth in Internet commerce has helped fatten state budgets, which ended fiscal year 1999 with a combined $35 billion surplus.
The ITFA, which was signed into law on October 21, 1998, created a national commission to examine how a tax system should apply to e-commerce
and the Internet.