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Gov. Jeb Bush Backs Internet Tax Deal

Gov. Jeb Bush, R-FL, has joined with 43 other governors and signed a letter urging Congress to give states new authority to tax Web-based sales if the states simplify rates. Last year Bush refused to sign the letter.

More than 40 governors signed a letter last week asking Congress not to extend the moratorium on Internet taxation unless states are allowed to devise a system that would let them collect sales taxes on online purchases.

The letter, sent to all House and Senate members, urges Congress not to extend a 1998 moratorium on new and discriminatory Internet taxes unless states are granted the tax collection power. The moratorium expires Oct. 21. E-tailers must collect sales taxes only from residents of states where they have a physical presence, or nexus.

The letter states, “If you care about a level playing field for Main Street retail businesses and local control of states' governments and schools, extend the moratorium on taxing Internet access only with authorization for the states to streamline and simplify the existing sales tax system.”

There are many opponents to the governors. The Direct Marketing Association, for example, said last week that the governors are ill-advised. In addition, Republican National Committee chairman Virginia Gov. James Gilmore did not sign the letter. The White House, however, has not taken a stand.

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