*Members of ACEC Ask Gore to Break Commission Stalemate

Dean Andal, chairman of the Board of Equalization , Stockton, CA, and a member of the Advisory Commission on Electronic Commerce called on Vice President Al Gore yesterday to take immediate steps to remove the Administration’s opposition to a consensus proposal that is currently before the committee.

Last week, members of the ACEC voted on the consensus plan — called the “Business Plan” — that was proposed by the business caucus of the ACEC. If adopted by two-thirds of the commission, many believed the plan would have provided Congress with a clear blueprint of how to address the complex issues surrounding taxation of e-commerce.

However, the proposal received 11 votes of support by the last day of the ACEC’s meeting in Dallas. The plan, however, needs 13 votes to be presented as a formal recommendation to Congress. The ACEC must present a plan to Congress by April 21.

The business proposal would: Make permanent the ban on Internet access taxes, eliminate the 3 percent federal excise tax on telecommunications, establish standards for simplification of state tax systems, define nexus (connection) standards for a company’s physical presence and provide specific examples for out-of-state taxation, establish a new advisory commission to oversee states’ tax simplification efforts, extend the current moratorium on Internet taxation for an additional five years.

Noting that the compromise proposal voted on at the meting was two votes short of the super majority vote needed, Andal said that vice president Gore’s “immediate intervention is urgently needed. The current administrative proposal takes away protection from California consumers and increases their taxes and compliance burden.”

In his letter, Andal said that while it is clear that some of the state and local government representatives of the commission have no intention of ever voting for a proposal which does not advocate taxing e-commerce to the maximum possible degree, this leaves the “three appointees you control with the sole ability to either ensure that a reasonable policy is recommended to Congress or to throw our entire 18-month long process into deadlock on recommendations.”

He said that what was particularly frustrating was the “lack of any clear policy direction emanating from the Administration’s appointees. At our recent Dallas meeting, the private administration appointees abstained on all major policy votes. In our private discussions and negotiations, it was abundantly clear that the Administration had sent people who were neither equipped with a policy position nor were empowered to develop one on their own.”

Andal told Gore that the ACEC was going to try, one more time — on a conference call Thursday — to reach a two-thirds consensus, but “without your immediate leadership in the development of the Administration’s position, this last window of opportunity will close forever.”

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