Senate Offices: USA Today's Net Tax Story Inaccurate

Senior aides to the two senators crafting an Internet tax bill denounced a USA Today story claiming a compromise had been reached. However, the reporter of the piece said he stands by it.

“That story came on the record from all the principals, not staff members who may or may not know what's going on. [It was] reconfirmed to us yesterday, meaning Thursday,” USA Today reporter Tom Squitieri said this morning. When asked why no other news organization had picked up the piece, he said, “Hey, you know what? Sometimes we get lucky.”

The front-page story claimed that Senate negotiators had reached a deal that would extend the moratorium on new Internet taxes until 2006 but would open the door to increased collection of existing sales taxes that now go largely unpaid on Internet and catalog sales.

Under the plan, the story said, states would have five years to simplify their sales tax collection systems. If Congress approves the plan, Squitieri's piece said, taxes on almost all Internet and catalog purchases would then be collected.

This morning, Barry Piatt, a spokesman for Sen. Byron Dorgan, D-ND, said he had sat in on the USA Today interview and never once was a final agreement mentioned. Piatt pointed out that nowhere in the story is any source quoted as saying that such a deal had been made.

“The USA Today story is not accurate,” Piatt said. “There is no final agreement. I don't know why they wrote that there was.”

An aide to Sen. Ron Wyden, D-OR, also said the piece was inaccurate. Sources close to the situation say the USA Today reporter may have misconstrued progress to mean that a deal had been reached.

However, Squitieri said he has even more information than what was reported in his story.

“I actually have in front of me, which I will not share with you, from one of the principals, the actual written agreement,” he said, but he offered no details beyond those in the article. “Just because people weren't quoted in the story doesn't mean they didn't talk to us.”

Piatt said a piece of paper doesn't mean anything. Working drafts exist, he said, but there is nothing final.

“If he has documents showing a final agreement, that's going to be a surprise to all our principals,” he said.

The Direct Marketing Association issued a statement yesterday denouncing the USA Today story.

“The DMA has not seen any legislative language regarding the reported compromise on proposed Internet tax legislation on which to comment,” the statement said.

Wyden and Dorgan and their staffs, the DMA said, “have assured us that there has been no compromise on Internet tax legislation. The DMA's position on Internet sales tax remains the same: Congress must require the states to significantly simplify the nation's 7,600 varying sales tax rates before Congress requires remote sellers to collect and remit sales tax.”

Editor Ken Magill contributed to this story.

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