Key Vote Letter to Support Sen. McCain's Compromise to the Internet Tax Non-Discrimination Act (S. 150)

April 26, 2004

TO THE MEMBERS OF THE UNITED STATES SENATE:

I am writing on behalf of the U.S. Chamber of Commerce, the world's largest business federation, representing more than three million businesses and organizations of every size, sector and region, to urge you to support Senator McCain's compromise to the Internet Tax Non-Discrimination Act (S. 150), and to oppose any delaying tactics or amendments that would weaken the length and breadth of the moratorium.

The previous Internet tax moratorium, enacted as part of the Internet Tax Freedom Act, expired on Oct. 21, 2003, leaving taxpayers, consumers and businesses potentially subject to the imposition of additional taxes from any one of over 3000 state and local taxing jurisdictions. The growth of the Internet has revolutionized the way we transact business, and has fundamentally changed how individuals communicate and manage their daily lives. To continue to foster this growth, it is imperative that all governments – federal, state, and local - not impede this progress by imposing multiple or complex taxes that unfairly target Internet transactions. Therefore, the Senate must act quickly to restore the moratorium.

The McCain compromise would achieve these goals by extending a moratorium against state and local taxes on Internet access, as well as "multiple and discriminatory" taxes targeting Internet commerce, for four years. The compromise would also clarify that Voice Over Internet Protocol ("VOIP") is not covered by the definition of "Internet access" and therefore not subject to the moratorium, thus responding to the concerns about VOIP raised by State governments.

Therefore, we urge the Senate to expeditiously consider and support the McCain compromise. Moreover, we ask that you oppose any amendments to weaken the moratorium or reduce its length. The Chamber will strongly consider using votes on or related to this issue in our annual "How They Voted" guide to Congress.

Sincerely,

R. Bruce Josten

Executive Vice President, Government Affairs

U.S. Chamber of Commerce