[At-Large] US Marketplace Fairness Act of 2013 #Internet Sales Tax

Mon Mar 25 22:57:30 UTC 2013

OK, you win.  I'm out of here.

On Mon, 25 Mar 2013, Salanieta T. Tamanikaiwaimaro wrote:

>>
>> What does this have to do with anything that ICANN or NARALO does?
>>
>> Regards,
>> John Levine, johnl at iecc.com, Primary Perpetrator of "The Internet for
>> Dummies",
>>
>
> *The US Congress Tax Freedom Act – Let Me Go, I want to Breathe*
>
> Well it not new that the US has always maintained that the Internet should
> be a tax free zone as per the *US Congress's Tax Freedom Act 1998* (*authored
> by Representative Christopher Cox and Senator Ron Wyden and signed into law
> on October 21 1998 by then President Clinton*) which following expiry
> continued to be reauthorised and it most recent re-authorisation (legal
> speak for extension) was in October 2007 where this has been extended till
> 2014. It is unclear whether there will be another extension post 2014.  There
> is a moratorium on new taxes on e-commerce, and the taxing of internet
> access via the Tax Freedom Act.  Whilst the US Congress's Tax Freedom Act
> 1998 bars federal, state and local governments from taxing Internet access
> and from imposing discriminatory Internet only  taxes such as bit taxes,
> bandwidth taxes and email taxes, it also bars multiple taxes on e commerce.
> It does not exempt sales made on the Internet from taxation, as these may
> be taxed at the same state and local sales tax rate as non Internet sales.
>
>
>
> *The US Marketplace Fairness Act – You are strong, you can stand on your
> feet now*
>
> With the introduction of the *US Marketplace Fairness Act in 2013* in both
> the Senate and the House of Representatives will make for some interesting
> discussions and lobbying on the Hill. Whilst the Bill in its current form
> acknowledges the exemptions that are currently in place – the manner in
> which discussions play out by the manner in which both Senators and
> Representatives are having reflect a change in atmospheric pressure – which
> in my mind is significant.
>
> In 1998 when US Senate voted 96-2 to approve the Tax Freedom Act and the
> mere fact that the new Bill has 28 Co Sponsors and in the House of Reps,
> there are 47 co sponsors speak volume.
>
>
>
> *To Tax or Not to Tax*
>
> As early as 2000, the problems of tax free e commerce were
> discussed[1]<#_ftn1>.
> If e-commerce proceeds untaxed, it would mean that state treasuries would
> face an eroding tax base. States within the United States of America rely
> on sales tax for approximately 25-40% of their revenue[2] <#_ftn2>. As such
> there is a trade-off or opportunity cost as other taxes may have to
> increase to make up for the deficit caused by tax-free e-commerce.
>
> *Opportunity Cost and Impact on Other Industries*
>
> The deficit caused by tax free e-commerce means that other taxes may be
> subjected to increase and also potential funding may be siphoned away from
> other priority areas. Traditional firms or businesses who do no trade
> electronically are at a disadvantage as they are forced to collect sales
> tax at the register. This is why it is sometime cheaper to purchase a pair
> of boots online than if you were to walk into a traditional store.
>
>
>
> *Widening the Digital Divide*
>
> One of the issues that was discussed in the E commerce round table meeting
> was the widening of the digital divide where people without credit cards or
> Internet access may be forced to shoulder the burden of sales tax[3]<#_ftn3>
> .
>
> *E Commerce has truly blossomed*
>
> The term ``electronic commerce'' means any transaction conducted over the
> Internet or through Internet access, comprising the sale, lease, license,
> offer, or delivery of property, goods, services, or information, whether or
> not for consideration, and includes the provision of Internet access.
>
> Global business-to-consumer e-commerce sales will pass the 1 trillion euro
> ($1.25 trillion) mark by 2013, and the total number of Internet users will
> increase to approximately 3.5 billion from around 2.2 billion at the end of
> 2011, according to a new report by the Interactive Media in Retail Group
> (IMRG), a U.K. online retail trade organization[4] <#_ftn4>. The study
> estimates that business-to-consumer e-commerce sales in 2011 increased to
> 690 billion euros ($961 billion), an increase of close to 20% from a year
> earlier[5] <#_ftn5>.
>
> According to that study, the US remains the world’s largest single market
> as far as e commerce goes. The same study highlighted that with China’s
> phenomenal growth rates that it is speculated to surpass the United States
> in this regard shortly.
>
> The US Department of Commerce[6] <#_ftn6> reported that Total Retail Sales
> from the fourth quarter of 2012 was estimated at *$1,105.8 billion* which
> is an increase of 4% from the third quarter of the same year.
>
>
>
> *ICANN and its Revenue Streams*
>
> The explosive growth of the Internet and domain name registration has led
> to marked growth of the ICANN budget from revenues of about $6 million and
> staff of 14 in 2000, to revenues of $90million and a staff of 149 which was
> forecasted for 2012[7] <#_ftn7>.  ICANN is funded primarily through fees
> paid to ICANN by Registrars and Registry Operators[8] <#_ftn8>. Registrars
> are companies with which consumers register domain names and these include
> but are not limited to the likes of GoDaddy, Network Solutions and Google.
>
> Registry Operators are companies and organisations that operate and
> administer the master database of all domain names registered in each top
> level domain. For example, .com is operated by Verisign Inc and Neustar
> Inc. operates .biz .
>
> In 2011, ICANN received 94% of its total revenues from registry and
> registrar fees. That is Registry Fees contributed 49% and Registrar fees
> contributed 45% from registrar fees[9] <#_ftn9>.
>
> Without a doubt, the collection of fees from the new gTLD program could
> contribute to an unprecedented level of revenue for ICANN. It has been
> estimated that ICANN will generate revenue of $337million from the new gTLD
> application fees, which is twice the amount of traditional revenues from
> all other sources over the next couple of years. ICANN
> estimates[10]<#_ftn10>that there will be a surplus of $27.8 million
> after operating expenses
> (OPEX) is met.
>
>
>
> *List of Interesting Links*
>
> ·         Internet Retail Taxation in the United States -
> http://www.cj.com/internet-tax [To see State and Legislative Activity]
>
> ·         US Internet Taxation -
> http://minnesotaattorney.com/internet-taxation/  [Note: material is old and
> needs revision but it is helpful to see the types of taxes]
>
> ·         Advisory Commission on Electronic Commerce -
> http://govinfo.library.unt.edu/ecommerce/ITFA.htm
>
> * *
>
> ------------------------------
>
> [1] <#_ftnref1> 1st E-commerce Roundtable Meeting was held in Washington
> DC, 12-2 PM on April 13, 2000
>
>
>
> [2] <#_ftnref2> ibid
>
> [3] <#_ftnref3> ibid
>
> [4] <#_ftnref4> See:
> http://www.internetretailer.com/2012/06/14/global-e-commerce-sales-will-top-125-trillion-2013
>
> [5] <#_ftnref5> ibid
>
> [6] <#_ftnref6>
> http://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf
>
> [7] <#_ftnref7> ICANN, FY13 Operating Plan and Budget, June 24, 2012,
> available at http://www.icann.org/en/about/financials.
>
> [8] <#_ftnref8> The list of ICANN-accredited registrars is available at
> http://www.icann.org/en/registries/agreements.htm.
>
>
>
> [9] <#_ftnref9> ICANN Financials Dashboard, updated June 15, 2011,
> available at https://charts.icann.org/public/index-finance-fy11.html.
>
>
>
> [10] <#_ftnref10> ICANN, FY13 Operating Plan and Budget, June 24, 2012, p.
> 61, available at
> http://www.icann.org/en/news/announcements/announcement-13jul12-en.htm.
>
>
>
>
>
>

Regards,
John Levine, johnl at iecc.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. http://jl.ly