January 19, 2001, 12:00 AM

E-commerce Tax Committee Member Asks Clinton To End Stalemate

A member of the federal panel on e-commerce taxes has asked President Clinton to reverse the administration's opposition to a compromise proposal. Dean Andal, chairman of California's state Board of Equalization and a member of the U.S. Advisory Commission on Electronic Commerce, sent a letter to Clinton on Thursday, urging him to instruct the comission's three federal appointees to support a compromise package drafted by the panel's six corporate members.

The 19-member commission plans to vote on the proposal at its meeting in Dallas on March 20 and 21.

The compromise proposal calls for:

  • extending the current moratorium on taxing Internet access charges for five years;
  • eliminating all existing taxes on Internet access charges;
  • clarifying the business activity taxing authority of the states;
  • prohibiting sales and use taxes on software, music and videos
  • eliminating the 3% federal excise tax for telecommunications providers;
  • encouraging state and local governments to simplify their sales tax systems and develop a uniform interstate tax statute;
  • codifying the Supreme Court's "substantial physical presence" test for determining when an interstate seller is required to collect sales and use taxes.

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