24 Feb 1998 Forbes Blasts National Governor’s Association for Trying to Impose Taxes on Internet

(Des Moines, Iowa) Steve Forbes, Honorary Chairman of Americans for Hope, Growth and Opportunity, today sharply criticized the National Governors Association (NGA) for lobbying President Clinton and Congress to allow states to impose punishing new taxes on Internet commerce. Mr. Forbes also endorsed the “Internet Tax Freedom Act” sponsored by Representative Christopher Cox (R-California) and Senator Ron Wyden (D-Oregon).

“The governors should be unifying around cutting taxes, not raising them,” said Mr. Forbes. “State governments are awash in tax revenue these days. Governors should be investing their creative energies into passing wide, deep and permanent tax cuts, not finding new ways to impose new taxes that could cripple the exciting and explosive growth of Internet commerce.”

“The Internet Tax Freedom Act will create new jobs, aid small businesses and allow electronic commerce to flourish as we go into the information age of the 21st century,” added Mr. Forbes. “I urge the governors to give this bill their full support.”

Texas, for example, has already imposed a tax on home pages. It also double-taxes Internet service providers once for leasing phone lines and again for access to those same lines. Nineteen other states and the District of Columbia have also enacted such targeted taxes. Last year, Internet commerce totaled $200 million. As this grows, politicians will be tempted to impose stiff new taxes. This could also cripple thousands of small businesses by forcing them to collect taxes in every state, city, town and village from which customers order goods or services. Today there are more than 30,000 overlapping local taxing jurisdictions.

That is why the Internet Tax Freedom Act is so vital. It does not give special status to Internet commerce. It allows goods and services sold over the Internet to be subject to the same sales tax as a product sold via the mail or over the telephone. But the Act would stop states and municipalities from imposing targeted, discriminatory taxes on Internet services and commerce, and bar the Federal Communications Commission from regulating prices of interactive computer services.