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Dallas Mayor Ron Kirk Calls for "Fairness and Equality" in Taxation on Internet Sales

By Crystal Swann

Speaking during the general session of the National League of Cities meeting in Los Angeles, December 1-4, Dallas Mayor Kirk told the audience and fellow panelists that taxation on goods sold over the Internet does not amount to a "new tax." Mayor Kirk shared the stage with Steven Rauschenberger, an Illinois State Legislator, David Bullington, Vice President of Taxes, Wal-Mart, and David Gergen, who moderated the panel discussion.

Mayor Kirk who also serves as the only city-elected official on the Advisory Commission on Electronic Commerce, a 19-member panel created by Congress, eloquently conveyed to the audience that the issue is not about taxation of the Internet but is "about growth, about schools, about fire trucks, about public safety and it is about all the things we do at the local level and how we pay for it."

The difficulty, he noted, is that the matter has become a political debate instead of a policy debate. He stressed that the oversimplified statement, "don't tax my Internet," does not begin to address the policy implications of treating sales over the Internet differently than sales at the corner store or the local mall. Mayor Kirk stated, "we can't just make this an augment over money; we have to make this an augment over equality and make this augment in the context of our long-standing position of no unfunded mandates from the federal government."

Senator Rauschenberger joined Mayor Kirk in advancing the idea of fairness and equity in the application of sales taxes but had a slightly different perspective. Sen. Rauschenberger stated that "the federal moratorium on Internet taxation interdicts state sovereign rights to raise revenue, noting that 47 out 50 use sales tax as a state revenue source." He stated that if the moratorium is allowed to continue it could effectively result in the deconstruction of the sales tax as a state and local revenue. David Bullington pointed out that there are disenfranchised individuals who do not have the credit cards and the computers and who will be not be able to participate in the online tax-free purchases, but will instead be forced to endure an unfair 6-8% tax burden. He concluding by stating that the sales should be applied equitably and fairly to all sales transactions.

The panelists agreed overall that this is an issue that must be addressed and that local officials must become involved by educating members of their Congressional delegations.

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