III

106TH CONGRESS

1ST SESSION H. CON. RES. 190

IN THE SENATE OF THE UNITED STATES

OCTOBER 27, 1999

Received

CONCURRENT RESOLUTION

Urging the United States to seek a global consensus supporting a moratorium on tariffs and on special, multiple,

and discriminatory taxation of electronic commerce.

Whereas electronic commerce is not bound by geography and

its borders are not easily discernible;

Whereas transmissions over the Internet are made through

packet-switching, making it impossible to determine with

any degree of certainty the precise geographic route or

endpoints of specific Internet transmissions and infeasi-
2

HCON 190 RDS

ble to separate domestic from foreign Internet transmissions;

Whereas inconsistent and inadministrable taxes imposed on

Internet activity by subnational and national governments threaten not only to subject consumers, businesses,

and other users engaged in interstate and foreign commerce to multiple, confusing, and burdensome taxation,

but also to restrict the growth and continued technological maturation of the Internet itself;

Whereas the complexity of the issue of domestic taxation of

electronic commerce is compounded when considered at

the global level with almost 200 separate national governments;

Whereas the First Annual Report of the United States Government Working Group on Electronic Commerce found

that fewer than 10,000,000 people worldwide were using

the Internet in 1995, that more than 140,000,000 people

worldwide were using the Internet in 1998, and that

more than 1,000,000,000 people worldwide will be using

the Internet in the first decade of the next century;

Whereas information technology industries have accounted

for more than one-third of real growth in the United

States’ Gross Domestic Product over the past 3 years;

Whereas information technology industries employ more than

7,000,000 people in the United States, and by 2006 more

than half of the United States workforce is expected to

be employed in industries that are either major producers

or intensive users of information technology products and

services;

Whereas electronic commerce among businesses worldwide is

expected to grow from $43,000,000,000 in 1998 to more
3

HCON 190 RDS

than $1,300,000,000,000 by 2003, and electronic retail

sales to consumers worldwide are expected to grow from

$8,000,000,000 in 1998 to more than $108,000,000,000

by 2003;

Whereas the Internet Tax Freedom Act of 1998 enacted a

policy against special, multiple, and discriminatory taxation of the Internet and electronic commerce, and stated

that United States policy should be to seek bilateral, regional, and multilateral agreements to remove barriers to

global electronic commerce;

Whereas the World Trade Organization, at its May 1998

ministerial conference, adopted a declaration that all 132

member countries ‘‘will continue their current practice of

not imposing customs duties on electronic transmissions’’;

Whereas the Organization for Economic Cooperation and Development and industry groups issued a joint declaration

at an October 1998 ministerial meeting on global electronic commerce opposing special, multiple, and discriminatory taxation of the electronic commerce and the

Internet;

Whereas the Committee on Fiscal Affairs of the Organization

for Economic Cooperation and Development has stated

that neutrality, efficiency, certainty, simplicity, effectiveness, fairness, and flexibility are the broad principles that

should govern the taxation of electronic commerce;

Whereas the United States has issued joint statements on

electronic commerce with Australia, the European Union,

France, Ireland, Japan, and the Republic of Korea opposing special, multiple, and discriminatory taxation of

electronic commerce; and
4

HCON 190 RDS

Whereas a July 1999 United Nations Report on Human Development urged world governments to impose ‘‘bit

taxes’’ on electronic transmissions, raising concerns that

United States policy against special, multiple, and discriminatory taxation of the Internet may be undermined:

Now, therefore, be it

1 Resolved by the House of Representatives (the Senate

2 concurring), That the Congress—

3 (1) urges the President to seek a global con4 sensus supporting—

5 (A) a permanent international ban on tar6 iffs on electronic commerce; and

7 (B) an international ban on bit, multiple,

8 and discriminatory taxation of electronic com9 merce and the Internet;

10 (2) urges the President to instruct the United

11 States delegation to the November 1999 World

12 Trade Organization ministerial meeting in Seattle,

13 Washington to seek to make permanent and binding

14 the moratorium on tariffs on electronic trans15 missions adopted by the World Trade Organization

16 in May 1998;

17 (3) urges the President to seek adoption by the

18 Organization for Economic Cooperation and Devel19 opment, and implementation by the group’s 29

20 member countries, of an international ban on bit,
5

HCON 190 RDS

1 multiple, and discriminatory taxation of electronic

2 commerce and the Internet; and

3 (4) urges the President to oppose any proposal

4 by any country, the United Nations, or any other

5 multilateral organization to establish a ‘‘bit tax’’ on

6 electronic transmissions.

Passed the House of Representatives October 26,

1999.

Attest: JEFF TRANDAHL,

Clerk.