E-Commerce Panel Hopes For Progress At New York Meeting

WASHINGTON — Facing a deadline of next April, members of the congressionally-appointed Advisory Commission on Electronic Commerce meet Tuesday and Wednesday in New York City to continue drafting an Internet sales tax policy recommendation.

With only two other meetings scheduled after this week, the 19-member panel’s task will be hampered if there is a repeat of the political sniping which marked its first meeting earlier this summer in Williamsburg, Va.

“I want to be hopeful. But one of the worries I have about the commission is that if we take on too much, we can hold very nice meetings and produce a very nice report, but achieve nothing at all,” said Utah governor and commission member Mike Leavitt.

According to a report in Monday’s New York Times , some of the business leaders who serve on the commission fear that a recommendation might be scuttled by political appointees averse to anything that could be construed as a new tax.

An unidentified aide to a technology representative said a plan was being circulated that calls for businesses to collect sales taxes on Internet commerce if state and local governments agree to adopt a single tax rate for each state. Another option would commit industry leaders to produce software that allows companies to calculate any state tax rate.

But according to the aide, staff members of commissioners from the political arena are pushing them away from the deals.

Several business leaders on the commission, including AT&T chairman C. Michael Armstrong and Gateway computer chairman Ted Waitt, pleased state government representatives at the first meeting by supporting Internet taxation if a simpler, more equitable sales tax system could be devised.

But the commission includes staunch anti-tax foes as well. Virginia Governor Jim Gilmore, chairman of the commission, champions an aggressive anti-tax agenda in his state and says he is not convinced Internet sales should be taxed.

And Grover Norquist, president of the conservative Americans For Tax Reform, has said he views the commission as an opportunity to abandon state sales taxes completely.

Commission members have met once via teleconference since the Williamsburg meeting. That discussion produced an agenda for the New York meeting that calls for testimony and discussion on three topics: Internet access taxes; sales taxes on electronic commerce; and international tax issues associated with Internet sales.

The work plan allows time for both presentations from a wide range of experts and discussion among commission members.

“We’ve tried to be very limiting on outside groups. We think the commission itself was formulated to represent the broadest of views, and we have a lot of expertise in our members,” said Charles Schwab President and commission member David Pottruck.

The advisory commission, formed by the 1998 act of Congress that established a three-year moratorium on Internet taxation, is made up of eight representatives of state and local government, eight business leaders and three representatives of the Clinton administration.

The final two meetings are scheduled for December 14 and 15 in San Francisco and March 20 and 21 in Dallas.