Clinton Endorses Internet Tax Freedom Act

(February 26, 1998.)  President Clinton endorsed the Internet Tax Freedom Act (ITFA) at the Technology '98 Conference in San Francisco today.  On Tuesday, February 24, the National Governors Association adopted a resolution against the bill. However, both Gov. Pete Wilson (R-CA) and Gov. Don Beyer (R-VA) support the bill.

The act would prevent state and local governments from imposing taxes on the internet that are not also imposed on mail order and other sales operations.  The House version of the bill, H.R. 1054 sponsored by Rep. Chris Cox (R-CA) would impose a 6 year moratorium on new taxes, while the Senate version of the bill, S. 442, sponsored by Sen. Wyden (D-OR) would impose an unspecified moratorium.

California, northern Virginia, and Massachusetts are all home to many computer and internet companies.  Governors of these states all support the ITFA.  In contrast, many other state, county, and city governments see the internet as a cash cow for new taxes.

Clinton stated that: I think America should adopt a moratorium on discriminatory taxation so that a bipartisan commission of elected officials, business leaders, consumers and representatives of the Treasury Department can carefully study the matter and come to a resolution. Therefore, I support the Internet Tax Freedom Act now before Congress, because it takes into account the rights of consumers, the needs of businesses and the overall effect of taxation on the development of Internet commerce."