Press Release

FOR IMMEDIATE RELEASE:
April 7, 2000

CONTACT:
Tony Iallonardo
(202) 293-7330

U.S. Mayors Blast E-Commerce Commission Report
Fair, Simple System to Maintain City Revenues Urged

Washington, DC -- Speaking on behalf of the nation’s mayors, Dearborn Mayor Michael Guido, expressed strong opposition to a report recently approved by a portion of the Advisory Commission on Electronic Commerce. The report, which was approved by 11 of the 19 members on the Commission, calls for numerous changes in state and local sales tax systems that will significantly erode their tax base.

Mayor Guido and other state and local leaders joined Senators George Vionovich (OH) and Bob Graham (FL) at a press conference in the Dirksen Senate Office Building to reject recommendations in the report which did not receive the necessary support required by law. Under the Internet Tax Freedom Act, the Commission is required to include in its report to Congress, only recommendations and findings that are approved by a 13-vote super majority.

Both business and government representatives were appointed to the Commission in an attempt to ensure that concerns from both camps would be addressed. In search for a compromise however, the business and anti-tax factions of the Commission made demands that would have required state and local governments to exempt huge amounts of goods and services from the sales tax. These included items such as books, magazines, movies, music on compact disk ,electronic games and other digitized goods downloaded over the Internet. Also, they would have been required to exempt all functionally equivalent goods sold over the counter. Further they would have been required to make changes in the nexus laws to exempt affiliates and other parties from tax collection obligations.

“Instead of grappling with this issue to produce a win -win solution, the Commission turned itself into the mouth piece for the companies that have representatives on the Commission, who want huge tax breaks at the expense of their competitors,” said Mayor Guido. Further, he said, “the net effect of these recommendations would be to significantly erode the state and local tax base.”

Mayor Guido appealed to members of Congress to “ignore this one-sided report and adopt recommendations in a proposal supported by the Conference and other state and local groups called the “Streamlined Sales Tax System for the 21st Century”. Guido explained that this proposal would eliminate the administrative burdens on local retailers and remote sellers. He also said the proposal would use today’s technology to make the collection and remittance of state and local taxes simpler for everyone.

The United States Conference of Mayors (www.usmayors.org) is the official nonpartisan organization of cities with populations of 30,000 or more. There are about 1,100 such cities in the country today. Each city is represented in the Conference by its chief elected official, the mayor.

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