Extension Of E-Tax Ban Is Virtual Certainty

With members of the U.S. House and Senate playing election-year politics -- many Republican and Democratic legislators are fearful of offending the high-tech stalwarts of the "New Economy" -- the current moratorium on some new Internet taxes, slated to end in 2001, is likely to be extended in some form. The House voted May 10 to extend the ban for five years. The measure now goes to the Senate. To be fair, what may seem to be an easy out for the legislators also reflects a wider absence of consensus on the issue. Indeed, the federal Advisory Commission on Electronic Commerce, chaired by Virginia Gov. James S. Gilmore III, was unable to muster the majority needed to make formal recommendations in its report to Congress last month. "New issues arise every day, and nobody knows yet how they're all going to play out," says Dorothy Coleman, vice president for tax policy at the National Assn. of Manufacturers, Washington. "We need to extend the current time-out to sort through all of the unanswered questions -- and those we don't even know to ask yet."

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