Leahy And Allies Push To Extend Internet Tax Moratorium,
Which Expired Last Saturday

WASHINGTON (Wed., Nov. 5) -- Sen. Patrick Leahy once again is at the core of a bipartisan coalition that is pushing to maintain – and this time, make permanent – the federal ban on taxes that only apply to Internet access and commerce. Leahy joined allies from the U.S. Senate and House and from the private sector Wednesday in a news conference to preview their upcoming Senate fight to make the Internet tax moratorium permanent. 

Leahy has been a leader of earlier successful efforts that instituted the Internet tax moratorium in 1998.  He later helped win extension of the moratorium in 2001.  The current moratorium expired last Saturday (midnight, Oct. 31).  The Internet Tax Non-Discrimination Act would make the moratorium permanent and is expected to reach the Senate floor for debate by the end of this week.   

Leahy said that without the moratorium, as many as 30,000 different jurisdictions could place discriminatory and multiple Internet taxes on e-commerce, which could threaten the stability and potential of the Internet. 

During Wednesday’s news conference, Leahy highlighted Vermont Teddy Bear’s success in building its business over the Internet, and the Vermont firm quickly became a touchstone that several speakers also used to make the case for the Internet tax moratorium bill. Vermont Teddy Bear does 60 percent of its business online during Valentine’s Day and Mother’s Day. 

“Although electronic commerce is beginning to blossom, it is still in its infancy,” said Leahy, co-founder and co-chair of the Congressional Internet Caucus.  “Stability is the key to reaching its full potential, and creating new tax categories for the Internet is exactly the wrong thing to do.  We need to make the moratorium permanent.”

Leahy is known as the “cyber senator” for his longtime work on and interest in Internet issues and for his efforts to promote e-commerce in Vermont. Leahy’s full statement from Wednesday’s news conference follows.

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Remarks Of Senator Patrick Leahy
On The Internet Tax Non-Discrimination Act Of 2003
November 5, 2003

I thank Senator Wyden, Senator Allen, Senator Sununu, Congressman Cox, and Congressman Cannon for their leadership on this legislation. The growth of electronic commerce is everywhere, including my home state of Vermont.  For example, the Vermont Teddy Bear Company, which employs 300 Vermonters, sells 60 percent of its bears online during its two busiest times of the year -- Valentine’s Day and Mother’s Day.  That’s 60 percent of their business during these two holidays.  How could anyone vote against bears as cute and cuddly as these?

Although electronic commerce is beginning to blossom, it is still in its infancy.  Stability is the key to reaching its full potential, and creating new tax categories for the Internet is exactly the wrong thing to do.

Indeed, without the moratorium – which expired just days ago -- there are 30,000 different jurisdictions around the country that could levy discriminatory or multiple Internet taxes on E-commerce.  Let=s not allow the future of electronic commerce -- with its great potential to expand the markets of Main Street businesses -- to be crushed by the weight of discriminatory or multiple taxation.

We need to make the moratorium permanent to provide the stability necessary for electronic commerce to flourish.

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