The US Congressman behind a bill proposing a moratorium on internet taxes has compromised in the face of opposition of groups such as the National Governors Association (NGA) and other state and local groups. Representative Christopher Cox has halved the proposed moratorium period from six to three years and will allow any taxes that were imposed prior to March 1 to stand. However, governors and mayors have also compromised because they have publicly advocated imposing a flat-rate tax on goods sold over the internet to compensate local businesses that they say will suffer if products are bought from elsewhere. The bill would ban taxes on internet access and online services, bit and bandwidth taxes and any additional taxes on electronic commerce for three years. It would also create a 29-member commission on internet commerce that would report to Congress within two years on a simplified system for collecting state- based internet sales and usage taxes. The commission would comprise representatives from state, business, consumer, local and federal interest groups. Cox apparently worked out the compromise with Utah governor Michael Leavitt, the incoming president of the NGA. Cox expects the bill to pass through Congress before the Easter recess on April 2.
