By Borut, Donald J.
Nation's Cities Weekly , Vol. 22, No. 28
Last fall Congress passed and the President signed the Internet Tax Freedom Act. That law placed a three-year moratorium on new Internet taxes and created an Advisory Commission on Electronic Commerce to sort out and make recommendations to Congress about the taxation of electronic commerce in the future.
State and local governments depend heavily upon sales taxes to provide critical services to citizens, so the commission's recommendations will have significant long-term consequences for dries and towns and for our nation's state and local government revenue systems.
The newly-appointed commission held its first meeting two weeks ago (see The Weekly, 6/28/99,) and will hold additional meetings in September, December, and March, 2000.
Right from the start, the commission's operations have been mired in politics and controversy. Despite the law's mandate requiring equal representation from the public and private sector, the initial commission appointments made by members of Congress were heavily biased in favor of business representatives. After a lawsuit and the replacement of one commissioner, the group achieved a numerical--if not a representative--balance.
So state and local government representatives went to Williamsburg, Va., facing what appeared to be a stacked deck. We were pessimistic about the chances of receiving a fair hearing on the issues of state and local government revenue needs or tax fairness for local businesses.
But as members of the commission made their opening statements, it was evident that many of them understood the fiscal needs of the public sector.
Most commissioners did not stake out dead-end, ideological, "tax freedom" positions; instead, they agreed that government services matter and that how those services are financed in the future is critically important to our nation. They were interested in how all parties at the table could benefit in an environment that ensured tax neutrality, fairness for all, and simplified tax collection and administration systems. …