Internet Tax Proponents Claim Public Support

As the third meeting of the Advisory Commission on Electronic Commerce (ACEC) wraps up today in San Francisco, California, a group of brick-and-mortar retailers is claiming that a recent national poll indicates that more than 60 percent of respondents believe that online retailers should be subject to the same taxes as their offline counterparts.

According to the e-Fairness Coalition, 63 percent of the 600 people polled said that the tax levels should be equal for both types of businesses, and 71 percent said that they would not change their shopping habits if existing tax laws were applied to online retailers.

The coalition did not indicate what percentage of the respondents have shopped online.

The coalition is made up of national retailers like Wal-Mart, local retailers, retail associations, real-estate trusts and shopping malls. It claims to represent over 350,000 retail stores nationwide.

“We don’t support creating new taxes on the Internet, but like most Americans, we believe all sales tax should be equally applied on all commercial transactions, whether they take place online or in a store,” said Wal-Mart Vice President and e-Fairness Coalition founding member David Bullington.

Magnet for Debate

The issue of Internet taxation has created a sub-industry of commissions and special interest associations. Advocates of a continuation of the Internet tax moratorium have formed their own association to counter those like the e-Fairness Coalition. They have joined the chorus of voices that say that taxation on e-commerce transactions will severely hamper the growth of the Internet.

Then, of course, there is the ACEC, which was appointed by the U.S. Congress. The 19-member commission is made up of the CEOs of AT&T, Charles Schwab, AOL, the governors of Utah, Virginia and Washington, and a number of representatives from the Commerce Department, Treasury Department, and state and local organizations.

Coast-to-Coast Meetings

The organization convened in Williamsburg, Virginia in June and moved to New York City before coming to San Francisco. The commission is scheduled to make a report to Congress in April on whether the three-year Internet tax moratorium should be lifted, extended or replaced.

At issue, of course, is money. The e-Fairness Coalition claims that state and local governments stand to lose $10 billion (US$) in tax revenue by 2003 if online retailers are not required to collect sales tax.

Some 49 percent of state revenues come from sales taxes, the coalition adds.