The U.S. Senate on Nov. 15 voted 57-43 to renew the moratorium on Internet access taxes for another two years, through Nov. 1, 2003. The previous ban, enacted in 1998, expired on Oct. 21. Last month, the House approved an identical bill, which President Bush supported.
The original moratorium, enacted in 1998, prevented states and local governments from hitting Internet marketers with new taxes that could hinder e-commerce growth. But with states losing an estimated $13.3 billion this year in non-taxed e-commerce, it’s likely that legislators will try once again to untangle the stranglehold that the 1992 Supreme Court decision “Quill v. North Dakota” has on states’ ability to tax mail order—and now Internet—sales placed through out-of-state marketers. The unsuccessful effort of Sen. Mike Enzi (R-WY) to link the moratorium with the sales tax issue suggests that the issue is far from dead.