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U.S. counties lodge class-action suit over Internet taxation

March 13, 1999
Web posted at: 2:06 p.m. EST (1906 GMT)

by Jennifer Jones

internet tax

(IDG) -- The National Association of Counties and the U.S. Conference of Mayors today filed suit to block any meetings attempted by a national panel assembled to decide the future of Internet taxation.

Frustrated because Congress has failed to add more local government representatives to a new Internet tax commission, the two associations lodged the class-action suit in the U.S. District Court for the District of Columbia.

NACo, USCM and several other government associations have long argued that congressional appointments to the Advisory Commission on Electronic Commerce are skewed toward industry. The commission was born from last year's Internet Tax Freedom Act, which called for a 19-member panel to examine e-commerce taxation and policy issues during a three-year ban on the levy of any new Internet taxes.

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"The Internet is the major boulevard of commerce for the 21st century. In order for the commission to conduct a fair study and make legitimate recommendations, state and local governments must be given an equal place at the table with business and industry interests on the commission. This cannot be achieved with the current makeup of the commission," the civil action stated.

"It will frustrate the very purpose of the [Internet Tax Freedom Act] to allow business interests to make recommendations to Congress without equal representation from the smallest units of government most affected by its decisions," it said.

Named as defendants in the suit were industry leaders tapped by congressional leaders Sen. Trent Lott (R-Miss.), House Minority Leader Dick Gephardt (D-Mo.), Senate Minority Leader Tom Daschle (D-S.D.) and former House Speaker Newt Gingrich (R-Ga.). Industry leaders fingered directly in the suit include top brass from Netscape Communications Corp., MCI WorldCom, the Direct Marketers Association, America Online, Gateway Inc., Charles Schwab & Co., Time Warner Inc., Americans for Tax Reform and the National Conference of Commissioners on Uniform State Laws.

Plantiffs on the suit include Betty Lou Ward, NACo president and Wake County, N.C., commissioner, and Deedee Corradini, mayor of Salt Lake City and the USCM president. The associations have asked the court to declare the commission improper; prevent the group as it is currently composed from meeting and reimburse NACo and USCM for any legal fees.

A New Year brings talk of new Net rules
January 6, 1999
Senate passes Internet Tax Freedom Act
October 9, 1998
California calls timeout on Internet taxes
August 26, 1998
More Fighting To Come Over Internet Taxes

Memo to the Leviathan: Internet remains an essentially 'unregulatable' space
(Industry Standard)
The Internet Economy 1998: When business bought the Net
(Industry Standard)
Net tax ban gets Senate OK
U.S. government must maintain control of Internet
New E-commerce lobby aims to curb online laws

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Internet Taxation
State-by-state summaries and a table of current tax laws and pending legislation
NACo - National Association of Counties
U.S. Conference of Mayors

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