• by November 16, 2001

The Direct Marketing Association (The DMA) said that it supports today's decision by the Senate in favor of a clean two-year extension of the moratorium on Internet access taxes and its rejection of an amendment that could have led to the state taxation of sales over the Internet.

By a vote of 57 to 43, the Senate voted to table an amendment offered by Sens. Mike Enzi, R-Wyo., and Byron Dorgan, D-N.D., that would have required Congress to either grant or deny states the right to tax Internet sales, provided at least 20 states sufficiently simplify their disparate tax systems.

The language of the legislation approved today was taken directly from a House-passed extension, and adds two years to the ban on new and discriminatory Internet taxes that expired on Oct. 21.

In reaction, DMA president & CEO H. Robert Wientzen, said, "The moratorium's extension will allow businesses to develop and stretch their wings on the Internet.

"The moratorium's extension will ensure that e-commerce can continue to grow, and it will go a long way to bridging the digital divide," he added. "The DMA is pleased that the Senate understands the critical need for the moratorium and the growth in business that it can foster -- especially in the current economic environment."

Frank Julian, operating VP and tax counsel at Federated Department Stores, Inc. and chairman of The DMA's Use Tax Steering Committee, said, "Resolution of the Internet access tax moratorium is a victory for the economy because it reduces the amount of uncertainty firms have about whether states will effectively reduce online traffic by putting up toll roads."