Lloyd Bentsen: “I am in opposition to H.R. 3709, the ``Internet Nondiscrimination Act,'' which extends the existing moratorium on state…”

“I am in opposition to H.R. 3709, the ``Internet Nondiscrimination Act,'' which extends the existing moratorium on state and local taxation of Internet access and commerce by five years and repeals the grandfather clause for existing state laws related to Internet taxation. Let me be clear, I am not advocating federal taxation of the Internet. I support a reasonable extension of the moratorium. But, I also support upholding state's rights under the 10th Amendment and ensuring equity for businesses, small as well as large. H.R. 3709 would establish a five-year moratorium on all state and local taxes on Internet access and commerce. While this bill assumes that states would still be free to tax transactions under the U.S. Supreme Court's 1992 decision in Quill Corp. v. Heitkamp, 504 U.S. 298 (1992), the Quill decision only provides for the collection of sales taxes by states when companies meet the ``nexus'' test for transactions within the geographic borders of the consumer's state. Though not explicitly acknowledged, proponents of H.R. 3709 appear to be seeking an eventual ban of Internet sales taxes. Now, of course, all of us would like to see less taxes, including with respect to Internet sales. At the same time, however, as internet sales rise as a share of the national economy, state and local governments will find their tax based substantially eroded and their ability to fund such essential functions as schools and public safety jeopardized.”