The U.S. Senate Oct. 8 passed the Internet Tax Freedom Act, which will place a two-year moratorium on new Internet taxes by federal, state, or local governments. According to a release from Missouri Sen. John Ashcroft, the moratorium is necessary to protect Americans using the Internet from being taxed by as many as 30,000 potential taxing jurisdictions.
"The Internet Tax Freedom Act will provide vital assistance to a large and growing American industry, one in which the United States is clearly the world's leader," Ashcroft said in the release. "If the Internet isn't protected from efforts to dream up new tax schemes, the expansion of cyberspace could come to a shuddering halt."
Ashcroft noted that "the Internet added $8 billion to our economy in 1997, and is expected to grow to over $300 billion in 2002. This job-creating growth will disappear if the Internet is saddled with multiple, complex, and duplicative tax burdens. We need the Internet Tax Freedom Act, and I urge the president to sign it."
Ashcroft was one of the bill's earliest co-sponsors, the release stated.
The Internet Tax Freedom Act bars any new Internet taxes for the two-year period. It does not alter sales tax
arrangements for Internet transactions, which parallel rules for mail orders.
A New Beginning, Ashcroft's new comprehensive economic plan, specifically endorses passage of the Internet Tax Freedom Act as part of his program to unleash the full potential of the information economy, the release said.
The Internet Tax Freedom Act, which passed the House of Representatives unanimously in June, will also create an advisory commission to study and recommend to Congress the appropriate taxation and tariff treatment of Internet activity, according to the release.
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