Leahy sponsors moratorium on Internet taxes

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(Host) Congress has given its approval to legislation that prohibits a tax on Internet services for another three years. Senator Patrick Leahy, who’s a key sponsor of the proposal, says the plan could lead to the creation of hundreds of new jobs in the state.

VPR’s Bob Kinzel reports.

(Kinzel) Leahy has been at the forefront of the effort to place a moratorium on the taxation of Internet sales ever since Congress put the first ban in place in 1998. Leahy says commerce over the Internet is still a growing industry and could be stifled by excessive taxation.

Without a moratorium in place, Leahy says companies that sell goods on the Internet could be subject to hundreds of different taxes at the federal, state and local level:

(Leahy) “I feel we need to extend the moratorium we still have Internet commerce growing working getting its feet on the ground and a lot of it are very small companies if they had to deal with a thousand different or even more than a thousand different tax jurisdictions there’s no way they could continue their business.”

(Kinzel) Leahy says he doesn’t think a continuation of the ban will hurt downtown merchants where sales are subject to the state’s 6 percent sales tax:

(Leahy) “I go to those stores all the time partly because I don’t pay any shipping costs by going to the stores downtown I like to look at the things I’m buying if I can find what I want in a local store then I by it there . both work both can be part of commerce but there’s a lot of Vermonters who are employed today who would not have jobs today if it wasn’t for a number of the companies in Vermont who do Internet sales.”

(Kinzel) Leahy is hoping that the new 3 year moratorium will encourage the National Governor’s Association to support a single stream-lined Internet tax plan for the future:

(Leahy) “Ultimately I expect the governors of the 50 states will agree among themselves to have one central place to collect one agreed upon tax on Internet sales and that will solve everybody’s problem because if you’re a small Internet company you’d only report to one place instead of a 1000 places and I hope that this moratorium is an incentive for the governors of the country to come together and they could very easily agree on one tax for Internet companies.”

(Kinzel) The moratorium also bans the taxation of Internet hook up technologies such as DSL, satellite and cable modem services.

For Vermont Pubic Radio I’m Bob Kinzel in Montpelier.

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