Forum on Taxing E-commerce Sales Ignites Debate

Date:  Sat, 2000-07-01

Chamber Comments July-August, 2000 Charlottesville City Council Chambers was the scene of a spirited panel discussion on “Internet Taxation.” Chamber Chairman Bob Moorefield served as moderator. The panelists were Delegate Paul Harris, member of the national Advisory Commission on Electronic Commerce; representing the technology sector, David Martin, President of M·CAM and the Chamber’s Technology Roundtable Chairman; representing the public sector finance and County of Albemarle, Melvin Breeden, Director of Finance for the County of Albemarle; representing the regional retail sector, Ron Martin, President of Ron Martin Appliance and the Chamber’s Retail Roundtable Chairman. Delegate Harris agreed with the majority of his committee’s opinion that the moratorium against Internet taxation should continue. This, he said, would help ensure the continued growth of the new high-tech economy and give small, Internet based companies a chance to develop and compete. All panelists agreed they were against “taxing the Internet.” Ron Martin stated, however, that is was intellectually dishonest to include the required collection of already existing taxes (such as sales and use taxes) when discussing whether or not to “tax” the Internet. Brick and mortar merchants are already required to collect sales tax and pass it on to the State, thus increasing the cost for a consumer to do business with them. Such merchants wish a level playing field. Martin pointed out that it is simply not fair to require retailers to collect state taxes when selling a certain product while at the same time freeing an Internet retailer from the requirement of either collecting the sales tax or furnishing information which would allow the state to collect the tax on that same product. Melvin Breeden indicated the state and local jurisdictions would increasingly lose revenue if Internet sales are to grow as projected. Inevitably, this revenue would need to be replaced or services cut. From the technology sector, David Martin agreed with the point that the requirement that brick and mortar merchants collect taxes which Internet merchants are exempted from is unfair. He expressed deep dissatisfaction with the existent complexity and lack of fairness in the current system of business and retail taxation. Martin pointed out that the very fact that the cost of doing business can change drastically from state to state and even from locality to locality in dependence upon tax codes is an example of the inherent unfairness in the traditional tax system. His desire is to see companies making use of new technologies, like the Internet, and doing business in those new technology environments, no be subjected to the current “antiquated” tax system. “We need a new model,” says Martin, for a business environment that no longer recognizes borders.