To subject it to as many as 30,000 taxing jurisdictions applying different rules of taxation would be a mistake. Americans shop over the Internet for everything from furniture and clothing to automobiles and books. Purchases are based on brand names and lowest prices.
Online customers pay with credit, debit or other electronic methods of exchange.
While a sweeping retroactive moratorium would have a devastating effect, a moratorium as proposed in Rep. Bliley's compromise House legislation would leave existing state and local revenue structures intact, so the short-term effect in that regard is minor. Local or state governments have stayed away from seeking to impose discriminatory taxes on the Internet, so little short-term impact exists there, either. At the end of the moratorium, Congress should be prepared to enact much-needed legislation to create a fair and equitable tax structure for traditional and electronic commerce. The moratorium does not affect local or state governments' authority to collect taxes on transactions within their jurisdiction. Any e-commerce transaction is subject to the same taxes as any other sale, whether by telephone, facsimile or in person.