The DMA and AIM Praise ACEC Business Plan

The Direct Marketing Association, NY, and the Association for Interactive Media, Washington, offered their support yesterday for the business plan recently proposed by the business caucus of the Advisory Commission on Electronic Commerce.

If the business plan was adopted by two-thirds of the commission this week, 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 on Monday during the final meeting of the 19-member commission, which formed in 1998 to recommend Internet tax policies to Congress. The plan needed 13 votes to be presented as a formal recommendation to Congress.

“While it is disappointing that the business plan did not receive the two-thirds vote necessary for a formal recommendation to Congress, we nevertheless think that the majority vote it did receive warrants it being passed along to Congress for its consideration,” said H. Robert Wientzen, president/CEO, DMA.

The recommendations in the business plan supported by the DMA and AIM propose that Congress:

• 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.

“The Business Plan would help ensure the continued growth of the Internet to the ultimate benefit of consumers and marketers,” Wientzen said.

In a last attempt to reach a compromise that will secure the necessary two-thirds majority, a conference call among all commissioners will be scheduled in the very near future. The commission’s report to Congress is due on April 21.

“While the commission has not yet delivered concrete recommendations to Congress, commission chairman, Gov. James Gilmore, R-VA, is to be commended for his leadership during this complicated, obviously contentious, process,” Wientzen said. “If other members had shown the same commitment to the process, including the three federal government representatives who abstained on every vote, we might well have seen a different outcome.”

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