DMA Backs Senate Version of Internet Tax Moratorium

The Direct Marketing Association last week put its support behind the Senate version of an Internet Tax Moratorium bill as opposed to the version that was approved by the House.

The Senate version, which focuses only on the Internet, calls for a six-year moratorium on taxation of Internet transactions and transmissions. According to the DMA, the House version includes a three-year “no-tax pledge,” along with a commission that could recommend new tax collection mandates on all out-of-state direct marketed offers made by mail order, catalog, telephone and the Internet.

“The moratorium will allow the interactive marketplace to take hold nationwide, while providing time for a commission to establish ground rules for online taxation of commerce,” said Mark Micali, vice president of government affairs at the DMA. “We endorse Internet tax moratorium legislation that does not invite new and burdensome tax collection.”

Micali told members of the Senate Finance Committee that they should keep the Internet the focus of their legislation. He went on to say that the House version would put the power of creating tax mandates in the hands of a commission, while the Senate version would leave it in the hands of Congress.

There currently are two Senate versions of an Internet taxation moratorium — one was introduced by Sens. John McCain (R-AZ) and Ron Wyden (D-OR), the other by Sens. Judd Gregg (R-NH) and Joe Lieberman (R-CT). The DMA said Senate majority leader Trent Lott (R-MI) probably will combine the two bills.

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