S 442 -- 10/01/98

October 1, 1998

S. 442 - Internet Tax Freedom Act
(Wyden (D) Oregon and 10 cosponsors)

The Administration supports Senate passage of S. 442, the Internet Tax Freedom Act. The Administration believes it is important to establish a temporary moratorium on Internet access taxes and taxes that discriminate against electronic commerce so that such taxation does not impede this promising new economic opportunity. The Administration also believes it is important to establish a Commission that will develop recommendations about the longer term tax issues involved. The Internet must not become a tax haven that drains the sales tax and other revenues that our cities and States need.

The Administration understands an amendment may be offered that would repeal the Internet Intellectual Infrastructure Fund ("the Fund"). The Administration opposes the repeal of the Fund, which would undermine the Next Generation Internet initiative, an investment in research and development that will lead to new breakthroughs in high speed networks, networking technology, and Internet applications such as telemedicine and distance learning. There would not be an Internet or graphical web browsers without Federal investment in research and development. Repealing the Internet Intellectual Infrastructure Fund would deprive the American public of the Fund's investments in revolutionary Internet technologies and applications and create uncertainty regarding the Federal Government's commitment to the Next Generation Internet initiative.