Senator intros bill to collect Net taxes

By Kathleen Ohlson, Computer World |  Business

The three-year moratorium on new Internet taxes may end prematurely if a new bill is passed, levying a 5% retail excise tax on goods sold via the Internet and catalogs.

Introduced by Sen. Fritz Hollings (D-S.C.) recently, the Sales Tax Safety and Teacher Funding Act would use the proceeds to fund teachers' salaries in elementary and secondary school, said Maury Lane, a spokesman for Hollings.

Hollings' proposed bill infringes on the Internet Tax Freedom Act, enacted into law last October. It imposed a three-year waiting period on state and local Internet taxes, and formed the Advisory Commission on Electronic Commerce to study Net-related taxes, tariffs and other issues.

But items that are bought through mail orders and the Internet have reduced the revenue for states and local merchants, Lane said. "We're in the middle of an education crisis," and the bill -- if it's passed -- "will no longer allow companies to skip taxes from where the product was bought," he added.

The bill is currently before the Senate Finance Committee. No date has been set for a hearing, Lane said.

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