John Conyers: “Mr. Chairman, this measure, the Internet Nondiscrimination Act, is not really what it seems, because it merely addresses…”

“Mr. Chairman, this measure, the Internet Nondiscrimination Act, is not really what it seems, because it merely addresses the most trivial of the Internet tax issues, the extension of the tax moratorium, and kicks the can down the road, so to speak, on the real issues, State simplification and the defining of what activity creates the necessary nexus for sales tax under the Supreme Court decision in Quill rendered in 1992. By extending the current moratorium for 6 years, more than two presidential elections from today, there is far less of an incentive for the States and Congress to deal with these far more important simplification issues. Indeed, there is a real risk that by 2006, many interests will become so dependent on the current system that it will become impossible to ever revisit the issue of State tax simplification. There can be no doubt that the present State system, which this legislation totally ignores, is a serious problem. First, the complexity of the system is daunting. There are over 6,500 taxing jurisdictions in this country. The jurisdictions generally require separate collection, have developed overlapping definitions of goods and services subject to tax, specifying different sets of exemptions and audit systems. Any retailer with a physical nexus to a State is subject to a myriad of confusing and complex State and local taxes.”