Federal Panel Urges Ban on Internet Access Taxes

Congress should ban taxes on access to the Internet, repeal a century-old telephone tax and refrain for now from trying to apply state sales taxes to purchases online, a federal e-commerce panel decided. A majority of the 19-member Advisory Commission on Electronic Commerce endorsed a proposal from its business members that also would extend by five years a moratorium expiring in October 2001 on new Internet taxes.

The proposal also would encourage state and local governments to simplify their sales tax systems. The decision marked a defeat for most of the state and local officials on the commission, who sought support for equal sales tax application to goods sold in stores or via the Internet.