October 17, 2001

Washington, D.C.-The Small Business Survival Committee (SBSC) today urged the U.S. Senate to act quickly and extend the current ban on Internet taxes.

SBSC President Darrell McKigney declared: "The U.S. House of Representatives did the right thing earlier this week by extending the current ban on online access taxes and other multiple and discriminatory taxes on the Internet.  Allowing states to tax the Internet would only lead to higher costs for individuals and businesses, not to mention providing additional resources for politicians to waste."

SBSC chief economist Raymond J. Keating noted: "Obviously, we think that the Internet tax ban should be made permanent.  Nonetheless, for now, it is critical for the U.S. Senate to approve the two-year extension before the current ban expires on Sunday.  Make no mistake, the current economic slowdown correspondingly has slowed the growth in state and local tax revenues.  Too many greedy politicians are looking to get their hands on new revenue sources, and the Internet is a major target."

Keating also criticized state officials who are trying to tie the Internet moratorium with the issue of forcing out-of-state businesses to collect sales taxes on catalogue and Internet purchases.  "In 1992, the U.S. Supreme Court made the right decision by not allowing states to force out-of-state businesses to collect their sales taxes.  Not only would collecting sales taxes for some 7,500 taxing jurisdictions around the nation be a costly nightmare for businesses, but out-of-state firms certainly garner no benefits from the services those taxes fund, such as local streets and schools," Keating observed.  "If politicians are truly concerned about sales tax competition, then the obvious answer is to slash their own sales levies."

McKigney concluded: "States and localities are not wanting for resources, as revenues have been flooding their coffers for decades.  If they face some brief, tough times, then those governments should do what small businesses do-cut their costs, that is, cut spending.  Looking ahead, everyone-individuals, businesses, and government-benefits from a robust economy.  Extending the current moratorium on Internet taxes, and not allowing states to extend the reach of their taxes beyond their own borders, are big plusses for the economy."

For more information, please call SBSC at 202-7985-0238, or visit SBSC's website at www.sbsc.org.  SBSC is a nonpartisan, nonprofit small business advocacy group headquartered in Washington, D.C.