Uncertainty surrounds first meeting of Net tax commission

Computer World –

WILLIAMSBURG, VA. -- The congressional committee charged with recommending a tax policy for the Internet met for the first time yesterday but quickly faced problems.

First, there was the issue of funding. Congress didn't give any money to the 19- member Advisory Commission on Electronic Commerce, expecting it to seek donations instead. The commission needs about $1.7 million, and members yesterday worried how they could raise the money without tainting the commission's work.

"We don't want it to look like people are buying access, buying influence," said David Pottruck, president and co-CEO of Charles Schwab & Co.

The second problem concerned the unease that some members have about the commission itself.

"There has been a certain tension around this commission that has delayed our launch and has made it awkward for us," said commission member Utah Gov. Michael Leavitt.

Leavitt was referring to the commission's initial membership imbalance that gave an edge to business interests. It prompted a lawsuit from state and county officials. Congressional leaders ultimately resolved the problem, and the commission now has eight representatives from state and local government, eight from business and three from the federal government.

Despite that initial obstacle, commission members interviewed said they will approach their job with open minds. But it's also clear that they are beginning their work with sharply differing perspectives.

For instance, Dallas Mayor Ron Kirk said he wants the commission to study how the inability of government to collect Internet taxes will affect "our ability to build schools, to build roads," he said. Kirk believes city services may suffer in the end.

But AT&T Corp. CEO and Chairman Michael Armstrong also made it clear that his company already faces a heavy tax burden.

"I think AT&T is an absolute expert in taxation," Armstrong said. "The U.S. has figured out more ways to tax telecommunications than just about any other industry. So I think I bring a depth of experience to this commission."

Some of the other businesses represented on the commission include Time Warner Inc., America Online Inc. and Gateway.

The commission was created following passage of the Internet Tax Freedom Act in 1998, creating a three-year moratorium on new Internet taxation.

The commission must complete its work by April 21, 2000.

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