Lieberman & Gregg Introduce
Internet Tax Freedom Bill

(April 1, 1998)  Senators Judd Gregg (R-NH) and Joe Lieberman (D-CT) introduced yet another internet tax moratorium bill yesterday.  Their bill, S 1888, joins competing bills introduced by Rep. Chris Cox (R-CA), HR 1054, Sen. Ron Wyden (D-OR), S 442, and others.

All of these bills are designed to foster development of the internet by imposing some sort of moratorium on new state and local taxes on internet businesses and activities.  These bills vary in the details.  How long is the moratorium?   What taxes are affected?  And, Who studies the issue in the meantime?

The Gregg/Lieberman bill would impose a moratorium on new taxes until December 31, 2001.  It would cover internet access, online services, bit taxes, bandwidth taxes, multiple taxes, and discriminatory taxes. 

However, it would not affect any tax in effect on March 1, 1998.  Nor would it restrict income taxes, business license taxes, sales taxes that also cover mail order and telephone sales, or real estate and personal property taxes.  Nor would it have any effect on federal taxation.

The bill would also create a fifteen member commission, made up of Presidential appointees, to study the issue during the moratorium period, and then issue a report to the Congress and President.  The Commissions would include the Secretaries of Commerce, State, and Treasury, three state Governors, three local officials, three people from computer, software, or internet companies, and three people from electronic commerce companies.

Sen. Gregg stated in a press release that this bill "is an alternative to other proposals making their way through Congress that seem to lean toward a national Internet sales tax.  Our bill puts the focus on limiting taxation and on developing a uniform system for commercial transactions that will reduce administrative burdens on Internet commerce."

Senators Lieberman and Gregg have named S 1888 the "Internet Fairness and Interstate Responsibility Act", or "NET FAIR" for short.