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!~RESIDENT;
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~ 'e attached memo from Gene Sperling, Mickey Ibarra ~~~:..~~
1 lrry Summers seeks your appro-val of a plan to take a more
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t ,':ive posrure on pending "electronic conimerce" legislation....:: ~_
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, iili01IT such support the bill will likely die.
I 1ckllronntL The Internet Tax: Freedom Act provides for a
s ,.dy process (including a Commission that you wowd
•• ,.,;"t) to deW/lop recommendations for pennitting
e :'OmJnet'Ce to develop free of various state and local taxes.
[ 1St SH1ntner. Larry Swnmers testified in favor of the billfs
E 'us llId principles, but stopped short of endorsing it. The hi
t :h iIlllustry strongly supports the bill and Big 7 stale and
I, : al groups (NGA, Coni, ofM.yorn, et al) oppose it. EarUer
tJ ("5 month. we proposed to the Big 7 that: we work jointly on a
b '! to Iddress their concerns; they declined hoping they can
k .1 th, bill but want to keep talJdng with us,
( (ItiOHS. Two an: presented.. but there is 00 support among
lIT ",1'Iisor> for the second. Option A =ommenrls that the
y
" lmiJJ i5lr1llioD actively support the bill while continuing to
s licit ltate and local views. Pros: opportunity to take credit
f; : an i ID.ti~tax initiative beneficial to e-.commcrce; good public
p iiey fur developing technology. Cons: Big 7 StoUpS woo" be
h ,'Pl', but will likely have to wad;; with us as the bill
p :grelses, In the end, only. veto will setisfy them. Option B
l! to centinue supporting the goals of the hill without endorsing
it but Ibis strategy ""uld kin the bill at this point,
~
~~
J. 1m Podesta and Larry Stein o1so support Option A.
Ibvv.~
_ ,.A,;rnewithOptionA
s.......""""
~ DO;
_DiSagree~ Discuss
Phil Caplan
~~
�THE WHITE HOUSE
WASHI NOTON
February 6, 1998
MEMO! J.NDlJM FOR TIre PRESlDEN,
From:
Gene Sperling(4JS
Director, Ntltional Eoonornic Council
Mickey Ibarra
~
Director, futergQvcmrnenj,fIfairs
Lawrenee g, Summ¢r'S
,{..Ie"
Deputy Se=taIy of the T_ury
Re:
Internet Tax Freedom Act (Colt·Wyden Legislation)
ACTIO 'FORCING EVENT
Congre i is C'll:Tently considering legislation (The Internet Tax Freedom Act. S, 442, H, 1054) introduced
by Sent flf Run Wyden (D~ OR) and Congressman Chris Ccx (R- CA) to impose a moratorium on new M
discrim 1atory (irate WUltion of the lnlemet. 'fhe legislation provides fQI" a study process to dev",lop
policy: l:om'l'lC11o.ations and is aimed at permitting eleotronic commerce to dow:lop free Qf distortionary
wc.es ir I'Qsoi by'myriarljutisdictions, It is based on principles set forth in a Treasury policy paper, in
the Jut: ,1997 Fram,(!':W()rkfor Global Ekctronic Commerce and myour P!:§idential Memorandunt on
electro !! eo tunetee and is consistent with the position we have taken in intemational discussions,
latiUSD ,not surprisingly. strongly SUJ'POl1S the bill, Earlier this year. seven CEQ, belonging to the
Compl (;f S) stems Policy Project.. inehadjng Lou OerstnerofmM. Lew Platt of Hewlett Paclrud and
Lan N ;,erg of NCR met wilh S~ Rubin md Deputy Secretary Summers to urge full support.
State;; Illo<ai groups sueh as the: National Gavemors' A.ssocll1tion. the US Confc:ren<:e of Mayors.
NAC(
the National League of Cities as weU as etCQtcd officials, however, strongly oppose the bill
I\S
usw:pi !: their ability to tv. (though officials from high tecb states such as Omtemors Wilson. Patak) and
CelJu( i supp¢rt it,) Opponents have been slow to identify specific problems that might be fIXed but cite
1wit.a :sJ;ar reymut:s iron-nne sal£! sn into mom sale;:,!l!Dt would mm~e taxes. They ate concerned
~ j~»l$UIll.Ct'S are liable for taxes Oll ma.il·«dc:r sales. tMe taJtes are
colletted.. State lUld
local I ':jup! have said t
e
tion·· 1
treet stQTe8 !lAd small im§inesse$ ,., across
.AJner' ir6ing 0
fO e ()$e due to the discri:m.i.natory impact ofa sales taX levied only on retail stQres.
not th i r Int lmlet competitDl'$." In view of the feder.ilism issue. last sununer. Deputy Secretary Su:mmers
testifi d in JaYQT ofthe bitl's gools and principle$ but stopped short ofendorsing it. Earlier this monlht he
propc lid ttl the Big SC\'en state and).o(;a1 orgatrizatiom that we workjointly on it bill that addJ:esses their
Gone( liS. l11eY declined the offer while suggesting ilult we ooutinue to talk. nu: Big Se'Vet1 rejected the
offer I:eaU~ they belicV'I': that they.;an cantinue.to delay or kill the legislation, and are not motivated to
1
coo~
- - - - - - ' - - , - ,
,
�work wit us until it is absolutely necessary.
On Novi {[ber 4, 1997, the Senate Commerce Committee reported out a bill. We understand that the
Senate '9" 11 woit far the House. Our active support is likely to help the bin and satisf}rhigh tech
propene
is
wtile 'withholding support would partially satisfy state and local groups. Your CUidance is
sought c whfther to take a mort:: acti'\'e position in support ofthc bill and therefore take credit for its
passage l' cor.tinue 10 maintain a low profile, A strong announcement of support early this session
would p ; babl;! carry the most weight. lOA would prefer that WI!; wait vntil mid~Mareh, to avoid
needlesr ;' antagonizing the Big Seven groups, who will be having rneetinss in February and early Mmh.
OPTIQ] H
A,
support the legislation while soliciting state and local views in order to address any
~ aws and legitimate concerns
~,ctiv Illy
l11is ')ption will give us the opportunity to take credit for an anti·tax initiative that wi1l be
:enel1cial to the development of cleetronic OOmlllet'(;e. From an economic pomt of view,
.:revc:otlng new taxC.s on a network that provides 50 many public benefits is good policy. 1M:
::ens.'e version has been improved to where Treasury's Offiee of Tax. Poliey now feels we can
IUpP)rt it, though some technical and substantive problems remain. This option wiU initially
increase pressure from statf;'and local opponents. However, as the legislation moves forward,
npp( ttents are likely to mcrC'l1slngly -value oUt' offer tQ use out offiees 10 address their remaining
I;ont:ems.
8.
:onuille current posture (support goals ruu1 pz:inciples without endorsing legislation)
Thi€ option While frustrating: high tech prcponents would initially do more to satisfy state and
loca t concet'tlS and might lead m the bill's failing to pass: However, if the bill plW¢.S In its current
form, anything short ofa veto win stin upset state and local opponents. Uwe take a toWer
proJ ile. we will also have less influence to improve the hill.
REC(
and b
whid
cone(
passe
,\,1MmIDAnON: Your ec:onomi~ and politioal advison (Treasmy. Commeree. l'\'EC, lGA. OMS,
Maf;azinet) reco:rnrnend Option A. The)' believe this legislation
foster electronic commerce
is en ,erging as an i:tnportant engine of growth while ~ our ability to address the legitimate
ItS oj state and local &ovmnments, Withholding support may cause the lqislation to fail. or if it
~1aY, subject us to!!:'trollg' pressure to veto a bill that we believe merits support
wm
Let's. Discuss
Agreed
RAC (GR O!.lND AND ANALYSIS
'Ihc 1tem!t Tax Freedom Act would permit state$ to continue to collect existing, nonMdi!criminatQty
tnxe' hut h'lposes a nIOl"atorium on new or di$eriminatoty ones and calls for a study process. Both bills
.call Jr yo J to QPfloint a oomrnission representing the states, iJuhtstry and the Adtttinistration, which will
thCll ;lS\Ie re«munendations which you may submit to Congress. 'The current Senate version of the bill
endr tne moratorium. in approrin'lateJy fiV'C: years on January 1, 2004, which we t:hink is appropriate.
2
�Treasury ~ rst !I!t forth the principle of tax neutrality for the Internet at the internatfonallevel in its paper,
Selected :u PYlicy Implications a/Global E/(lCll'onic C()mmerce, reltased ir. November 1996. That goal
was adol ed b:1 the sponsors of this legislation.
.
Deputy ~
the legis
guiding
subjecte:
:eret.uy of the Treasury SUf!ll'I\CrS testified last summer in favor ofthe goals and principles of
Irion "our, at that carly mae, stopped short of endorsing it. In his testimony, he set forth three
dnci)les~ first, that commercial activities oonducted by means of the Internet should not be
to Il'!W or discri=n1natoty taxes; second, that the Internet should :lot become a tax h:wen; and
third, th ; we ;hould be higbly sensitive to' concerns about f~eralism, In short, we supported technology
neutral. Jl!l"'<iiscriminab:ny, tantion of electronic commerce that preserved the state and local ~ base.
goo )fta;(, neutrality was then incorporated in the July I, 1997 paper, A Frameworkjor Glohal
nw
Electro. ': ComTnvce and inchlded in your July 1. 1997 Presidential Mem<.>randurn on electronic
cornme: ::. Vfe have adhered to this principle in international and domestic tax policy discussions,
.Efforts
;Mlmsi State and l.ocaJ Concerns
With & exCl~prion of officials in high tech states such as Governors Patnlci, Wilson.and Cellucei. most
state at ! loCi.l afficia!s opJ'Klse the legislation on the grounds that it illapprupriately restricts their right to
tax. 11 ;y an: particularly concerned that mpid growth in electronic commen:.:e wiU come at the expense
of stor·' !ales and, if treated Hkemail order sales fur tax ptlt'pOSe$~ will cut into sales tu rcvt:nUt;S, In faet
the bill :. srihlt1.t on whether neutrality tt.teaJ:IS neutmlity with store sales where merchants must collect
"sales i(." 0:' neut:rality with mail order sales where eoosumers owe "U$(l tax'" but mecchant! are not
requm ! to collect thell1, Nor does it address the thorny issues of"nerus" or where the saJe takes place
for tax JUtp(·aes,
As a p Icti<:allllJuer. states will face the problem ofhow to coUcet tax on out-of-state Internet sales
wheth I the bin pwes or l'I.Ot, The bin, as written. neither worsens nor solves their problem. Attempting
to sol' ! it would probably mean addressing the complex issue of mail order taxation. Rect:1ltly. a
propo :d dial between the Direct .Marketing Association and several1arge states on the mail order issue
fun III ::1 af er str:¢nS lmgative reaction from mail OIGet customers.
Since: f:giSlltion. was introduced. Tre{lSUrY officmltl bave met with the Multi-state Tax Commission, the
Big S l'etl J;roup of statz: and local organizations representing elected official~ and otherll to address
speci n cOtICc:mS. While state ()iflCialS generaUy expressed more interest in killing the bill than in
ldent' ~ring specific problems with the lanlj\Ulgf: of the bill, Tre.asuty did communicate ~ific
sug,g! I :1on~, we received. as Well as I)Ur own concerns. to drafters wOO incorporated most oftht:m in the
Sena : bill. In Jo;nu.uy. Deputy Secretary S\lJlU'l'lern made an offer to representatives of the Big Seven
state ad kcal organizations to workjointly on a bill addressing the states' larger remaining concerns,
How l-er, after some: consideration,. they turned this offer down. ptd'ening to worK with C¢ngreS$
dJr« Iy.
:~ (lat OPPOMnts have o.ften raised is to flip the hW'dem: ofthe bill around to ban specific taxes
duri: j; tru' moratorium rather than aU taxes except those carved back in. This approach wou.ld require
ind~ try tt. identify taxes it opposes rather than teqUiring the states to identify taxes they wish to impose.
Hov :ver, Treasury beHeYe$ tb3.t since states and municipalities best un4erntand state and local \aX ~ssues.
One
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they are ,:tter pOsitioned than industrY to identitY Whic,(l taXes should be permitted. We have not stated e.
position '.lbuHly and we could refrain from expressing a vieW.
Other id as 0fPonents have raised include IJO!.Ddf~thering all existmg taxes and shortening the:
mQTator 1m. The bm already grandfathers some taxes, Treasut1s Office of Tax. Policy believes thnt if'
the roof, i:>r1Wn lS significantly shortetIed, taxing lIuthorities may choose to simply wait it out rather than
actively : ngap~ in ~he study process, Moreover. shortening the moratorium may leave insu.fficient time
for the ~ ~tdy l'toces$ to be effective.
The bit:
idd up for l'Tl.SJl.y months by Senator Ted Stevens (R~ AK) over his desire, unrelated to t.'1e
01 ~.he bill, to require the FCC to revisit requiring lntemet Service Providers to pay into the
:, Ai:; jess Ftmd. On November 4, 1997, the Senate Commerce Conunittee rep0rte4 Qut the bill by
'rote (If 14 to 5. A f¢"quest by the Senate finance Committee to review the bill sequentially is
IIsi:m,,-ed by the Parliamentarian but a previous request was denied, The next action is likely to
':he House where Chris Cox believes supportm can move the bill out oftbe Comrr..crce and
;ro$
tu!iSpi' ~:s
Univetl
a stronl
being 0'
occur 1:
Judicio , ~OJ\ lmiriees,
In Dec
lQi.ldert
this is:.
red!aft
'ibcr 1997, Republican &ovemors raised their concem& about the legislation to the ConifCSSlou3.1
:p. 11ilii hIlS led·to a diatOfl betweClt Governor Lcavitt(R... UT). the governors' point person on
I:, and Congressman CQ;t( 0:1 how 10 move forward. Cox. is ~idering the states' proposal to
be bill to deolare :;. moratoriwn on specific taxes rather than all taxes except permj!ted ones,
Indust 'has $0 far resisted this approach. The Senate is likely 'to move the bill tQ the floor only after it is
repot'tl I out in the House.
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XVd SZ: T
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�THE WHITE HOUSE
•
WASHI NGTON
March 19. 1998
MEMORANDUM FOR THE PRESIDENT
FROM:
GENE SPERUNG
RE:
INTERNET TAX FREEDOM ACT
Yesterday, the Big 7 and Representative Cox reached agreement on a new version of the
Internet Tax Freedom Act. They are having a press conference on their agreement at I p.m.
Senator Wyden has not been involved in these negotiations, and has n01 signed offon the current
version of the bilt
•
Although we have not had time to study the bill in detail, we believe that it is generally
consistent with yourposittotl, namely: (1) a short-tcnll moratorium on new taxes on the Internet;
and (2) a process for resolving the longer-term issues associated. with the taxation of <>rcmote
commerce" (e.g, internet and mail order sales.) Your advisers (NEC, IGA, Legislative Affairs,
Treasury) think that it would be a mistake to fully endorse the bill at this point, given the lack of
support from Senator Wydcn and industry. We witl release a statement from you (attached) t,hat
will call this an "important and constructive step," praise Romer and Leavitt, but stop short ofa
full endorsement.
Ind!-:stry is currently split on the bill. Some of the large computer companies (c.g. rEM)
are comfortable with the thrust of the legislation, although they wiU seek changes. Other
companies, such as America Online. are concerned that the current draft "grandfathers" in
existing Internet taxes. Direct marketing companies may oppose the bill as well, since they have
been successful at preventing Congressional consideration of legislation that would overturn the
«Quill" decision.
.
The compromise -~ which is substantially diffefCnt has two components:
I,
It creates a 3 year mQratorium on both taxes on Internet access and taxes that discriminate
ngainst electronic commerce.
2.
•
,It establishes a 29 member commission that has 2 years to draft legislation that would
'establish a national framework for state and local taxation of "remote commerce." This
framework would include:
A single statewide sales tax rate -- with distribution to locat governments;
Simplification of sales tax administration and use of technology to collecl taxes;
A definition of "nexus,"
�•
The Big 7 organizations would cach get to appoint 2 members of the commisslOll. the
NGA would appoint the chair, and the other 14 memhers would be appointed by the
Administration and the Congress.
The legislation
wou~d
then be submitted to Ihe Congress for "expedited consideration."
If the legislation drafted by the commission is passed, states would have 4 years to adopt
a single salc~; tax rate, Otherwise, they would not be allowed to tax "remote commerce," In
addition, the moratorium on taxation oftntcmet access would be made permanent.
YQU shQuld..lmQw thal Cox is {clling induslry tbat he would probably not iiUJWQI1 the
icgi§iatiQn tbat this commission
umducc. Sjnc~ the Big 7 will get to nominate l5 orthc 29
meinbers ~- the commission wHl almost certainly recommend legislation that will rcpeal "Quill"
and result in increased taxes on mail order and Intemet sales. Cox is just arguing thal the states
and localities should get their "day in court."
will
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TH E WH ITE HOUSE
WASHINGTON
April 28, 1998
MEMORANDUM FOR GENE SPERLING
T~t
FROM:'
TOM KALIL
RE:
"B·RA TE" STATUS AND BACKGROUND
I. Glossary
In order to understand this issue, it is helpful to be acquainted with the following tenns
and programs:
Acce.. charges: These are the fees (roughly 520 billion/year) that long·distance telephone
companies pay to local telephone companies to originate and terminate phone calls. Long
distance companies argue that these fees are dramatically above the actual costs ofoperating and
maintaining the local network, Local phone companies argue that access charges are needed to
keep the costs. of residential phone service affordable. For example ~ they argue that the actual
cost or providing residential service is an average 0[$40 per month. although consumers only
pay an average $20 per month. Therefore, they argue, if acceSs charges are reduced, residential
rates will increase unless there is another mechanism for supporting universal service,
E~rate:
This is the Administration's name for the provision ofthe Telecommunications Act of
1996 to broaden the definition of universal service to include schools and libraries, (The Act
also provides discounts for rural health care providers.) Major features orIhe e~rate include:
•
Disc.ounts of20-90 percent -- with the deepest discounts for the poor and rural schools;
•
Coverage of telecommunications service. Internet access, and "inside wiring" (which
includes wiring and networking equipment);
•
A Heap" of $2.25 bHlion per year -- although the fund is not e.xpected to be $2.25 billion
in the first year: and
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'Program administration by the."Schools and Libraries Corporation"(SLC).
Incumbeut Local Exchange Carriers (ILECs): Local telephone companies like Bell Atlantic,
Ameritcch, Bell South, and GTE.
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Ixes: Long-distance companies I1ke AT&T, Mel, and Sprint.
Universal service: Universal service -- affordable phone service for every American that wants it
-- is a long-standing goal of U.S. telecommunications policy going back to the Communications
Act of 1934. It was fe-affirmed and expanded in the Telecommunications Act of 1996, At the
federallevel 1 there is explicit support for universal service for low-income Americans and people
living in "high-cost" (rural) areas, The explicit support, however, is only a fraction ofthe overail
costs of universal service. Much of the support is "implicit" -- such as infialed access charges.
Subsidies tend flow frolll: suburban. business, and long-distance customers to ruml, residential,
and local customers. An aJ1icie in Business Week, for example, estimated the actual cost of phone
service in Alaska to be $137/month. Although the Telecommunications Act of 1996 stated that
support for universal service should be made more explicil-- many members of Congress arc
now not so sure that this is a good idea.
to
n. E-rate status and time line going forward
•
The "window" for the first round of applications closed on April 15th, Roughly 30,000
applications have been received - from all different levels (e,g, schools, districts, state
wide networks) and a1150 states plus the District ofCoJumbia,
•
Sometime this week, the SLC should be able to estimate the total demand for discounts
from schools and libraries.
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The FCC may have to submit a report to Congress on the "e-rate by May 8th -
assuming a HoHingsJStevens/McCain amendment is attached to the supplemental.
•
Depending on the time required to process the applications ~~ the SLC could be ready to
send letters: to schools and libraries in mid-May ~ early June. These letters v.r:illlet the
Schools know the amount of the discount they will receive,
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In May, the FCC wHi have to make a decision about the size of the fund for the next half
of 1998. Funding for the first half of the year was $625 million. In a letter to Reed
Hundt, AT&T. Be1l Atlantic, and NYNEX agreed to support the e~rate if it "ramped up"
more slowly in the first year -- reaching a total of $1 ,75 billion in the first year.
H
III. Areas of conlroversy
1. Si:r...e of tile fund: Many rural members ofCongrcss (e.g. Sena10r StCVCtlS, Senator Bums) are
concerned that the "e-rate" will compete with the funds necessary to make rural phone rates
affordable.
2. Coveragl! of the fund: SBC. Bellsoulh and GTE have filed a suit against the FCC's "e-ratc"
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order, One of their major concerns was that the "e~rate" covered "inside wiring." They argued
that the FCC exceeded its legislative authority, and that it is not fair that companies like Cisco
should be able to benefit from the fund without paying in to it.
3. Administration of the fund: The FCC has been criticized for setting up a government
corporation without Congressional authoriza1ion, and for the salary of the SLC CEO. Senators
Hollings. Stevens and McCain added language to the supplemental Appropriations bill to
reorganize the SLC and to cap the salary of the CEO (currently $200,0(0).
,
4. Impact of the "e-rate" on long distance phone bills:
When former FCC Chairman Reed Hundt implemented the "e-rate" ~ he thought that
AT&T would not raise rates if tbe FCC lowered their access charges ~ and that other longM
distance companies would follow AT&T's lead. Access charges were lowcrc<1 by $1.7 billion
last July, and another $600 million is contemplated in July 1998,
However, the IXCs are arguing that they have already passed along the access charge
reductions to consumers -- in the form of promotions such as "5 cent Sundays." AT&T argues
that they only agreed not to inchlde "schoQls and hbraries" as a separate ljne item on the bin -
but they are free to add a line item to the bill to pay for all of universal service. The lXCs have
already added "universal service" surcharges to business bills of roughly 5 percent -- and have
put the FCC and the Congress on notice that they will add a surcharge to the bills of residential
long-distance customers as well begituling in June. Approximately one~third of these surcharges'
would go to schools and libraries ~~ the other two-thirds would contribute to low-income and
rural customers.
This is driving some members of Congress to put pressure on the FCC to decrease the
size of the fund. Conservative columnists such as James Glassman have argued that the "e-rate"
is a tax.
IV. Options (not mutually exclusive)
L Truth in billing: The FCC and members of the Senate (e.g, Senator Rockefeller) have been
advocating laws- or FCC regulations that would require "truth in billing," For example, if the
IXes are going to start showing increased charges for universal service ~~ they should show the
cost decreases that they have received from policy changes like reductions in access charges.
This would show consumers that there has been no D.Qt increase in their phone bill. This may still
not alleviate Congressional CQncern about the e-rate.
2, Furthe~ reductions in access charges: Some IXCs have argued that further reductions in
access charges would eliminate the need for them to add a surcharge to residential phone bills,
Of course. this would be strongly opposed by the ILECs.
3
�. -
3. Reducing the size of the fund: This is the least desirable option·· particolarly if demand (or
the '''e-rate'' is high.
4. Flat charge: This is a long-tcnTI. solution for 1999 and beyond. Long-distance companies
could rccover their "universal service" costs with a flat charge per long-distance phone bill of
$1,00 - $1.50 -~ depending on the size :of the fur.d.
V. Process going forward
,
.
•
NEC. OVP, Justice, Commerce. and Agriculture are continuing to meet on a weekly basis
to discuss this issue.
•
We need to increase senior Congressional support for the "e-ratc." Although Senator
Rockefeller IS a strong supporter - the FCC continues to be under pressure from other
members ofCongress to reduce the size of the fund - especia!1y from rural Senators on
both the Commerce and Appropriations Committees,
•
We should definitely see if we can arrange a POTUS "e~rate" event when the
announcement on the availability'of discounts is made. We don'1 know at this point
exactly when this witl occur, It may be as early as mid~May ~ but we expect that it will
be early June. The event should be bipartisan with a strong regional focus.
4
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TilE WHITE IIOUSIl
Office of the )Iress Secretary
(Monterey, California)
for immediate Release
JUlle 12,1998
STATEMENT BY TilE PRESIDENT
FCC Decision on (he E-rate
I applaud the decision by the Federal Communications Commission to move forward with the
"e·mtc" -. n critical initiative to connect our schools. libraries, and rural health ccmers to the
Internet Although I had urged that the e-ratc be fully funded, I remain committed to the gout of
ensuring ihat every child has access lo the tools they need to compete in the 21 st Century.
The e·rak will help create opportunity in the Infonnation Age for children and communities all
over America. Together with our Technology Literacy Challenge Fund. the e-ratc will ensure
that [or the first time in our Nation's history, a child in the most isolated inner city or rum! town
will have access to the same universe of know ledge as :II. child in the most affiuent suburb.
Parents will be able to communicate more frequently with teachers, and keep up with the
progress of their child in school. Our children will bc "technologically literate" -- and betler
prepared for the hig~-tech, high. wage jobs our economy is creating in record numbers,
I call upon all members ofCongrcss to support the FCC's decision. I will steadfastly oppose any
effort to pull the plug on the e~ratc and our children's future ~- or to thw~rt the FCC's ability to
move forward with this initiative. '
-30-30-30
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NU.
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UNITED STATES
DEPARTMENT OF EDUCATION
FOR IMMEDIATE RELEASE
o':l~
NI WS
Contact: David Frank
(202) 401·3026 (office) or
June 12, 1998
Tom Lyon
(202) 543-7564 (home)
STATEMENT BY U.S. SECRETARV OF EDUCATION RICHARD W. RILEY
regarding Federal Communleatlom Commb.loll (FCC) E-Rate deebion
Today's decision by the FCC to fund the E-Rate is • first step in connecting America's school
childIen to the Internet and preparing OUT childIen for the 21st century. Bill I{"ruwd and other
members of tile FCC resisted the last-minute efforts ofsome long-distance carrion; to stop the
E·1Ute Iwen though they have received $2.4 billion in lower ac.... _ •.
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While I am disappointed chat the FCC did not fully fund the E-Rate, the funding plan endorscd
by the FC.C moves us in the di=tion "fhelping !he po."'st schools in this nation ov""",me !he
digital dlvide. If some In Congress go ahead with their thecal I<> WIpIng the E-rate in the next two
weeks they will soon get a reputation that is well deserved for being anti-cducation.
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�, THE DEPUTY SECRETARY OF THE TREASURY
WASMIHGTOI'o!
JanllllIY 13,2000
MEMORANDUM FOR ASSISTA.'IT TO TIIE PRESIDE:sT GENE SPERLING
FROM:
StwIrt E. EizImsIat
'}4v
SUBJECT:
FoUcnZmg" on our conv-etSation: this tnomin& I wanted to layout fur you where we are on
up
Intcmet mx, First, on inter·agency process, David Beier and Sally Kattcn have been 11l!lllaging
an inter-agency pro.... to coordinate c-commerco which, J understand, has included Tom Kalil
from the NEC. TrClllllllY," the lead agency on tax matters, baa taken the lead pn thelntomet tax
piece, David, Sally and Lmy asked me to pcnonally take this on. As the isaue baa developed,
we have reached out to consult as a:ppropriatc with White Houae Legislative Affairs,
Intergoveinmen1Bl Affairs, Public Affairs, and the NBC. John Podesta held a Principal. meeting
before the1ast Intomet tax C<lmlIlilosion meeting. Both Lmy and r welcome any lovolvemem
thai you thinlc would b. oppmpriatc from the NEC going fOtwaro and I believe David feels the
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same,
As to the Commission (which was appointed by Congress pursuant to the Internet Tax Freedom
Act), it \s oonsidering severs! proposals at this point. A1l "lIllti-tax" proposal would prohibit
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or loo.aliti.. from requiring rem"'" ••n"", without. physic.1 promJ.ce to collect sales or
use taXes from residents, Co!nmission member Governor Leavitt orUtah has propoaed an ,
alternative I)n behalfof the National Governors' Association under which states and localities
'would simpluy their tax systems; provide tccImology for oIoctroulc collection of
on remote
sales; and provide incentives to remote sellers to collect sales and use taxes. At Qur last meeting
with David on Friday, we agreed to attempt to build OOWlCllS1l' fur a third proposal de4crihed in
. the attachment to thia memo.
tax.,
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Thi, week. 1llo tbrCc> Adminislrnlion commissioners will b. taking thli temperature oflh. owmg'
business metl1ben of lb. Commission Ii> see if we can find cbanlpions for our preferred
approach, We will meet again shortly to take <toek and tweak Our proposal ifllCC"'lIIY, NexI
week. Secretary Daley, SccrctllIY Summers and I will start calling CEOs in an atteropt to gain
support fur our proposal. W. are also drafting low·key outreach plllllll to the .tates and localities,
key Hill_Db.... and coropani.. not on the Commission who might b. snpportlve.
Allachment
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Revised Internot I.,; lron""! nfflOQ)
Following are ~c elements of tho Adx:n.i.n.istration's proposal for the Advisory Commission on
Electronic Cammerce-o
1. SaiesTu SImi>Wlcallon and Nexus StanditDJ
A. Tho National Conference of CommissionetS on UnifOl'l11 State Laws (NCCUSL) dr.U\ a
model sal.. tax law that ine<nporates appropriate simplification provisions. NCCUSL
should receive funding from various stakeholders.
B. ConSI=' implement by resolution A five year "D,",US slanclstiU", that is. that Congress Dot
"alter existing ncxils stanclsrds during the development by NCCUSL, and implementation by
the states, of the model $ales tax statute.
C~ Congress further study, for a period of five years) th~ issues associated with electronic
, commoreo, including: Digital Divide issuCS; eifect" on slate and local tax TOvenUCS: and
effects on other 1Onn& ofcommerce
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2. TeiecoDlmtLDications Taxation
A. Oppose repeal of the federal excise tax on comnilmicationB. While repealing tho tax has
.some policy merit (e.g.• therax may inh,ibit the "'"' oftelecommunications). repeal would
oosl the Federal goV<llJllient over $4 bilIien next year and $52 billion over 10 yearn and must
~e considered in light ofo.thei Administrat10n priorities.
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B. Endo"" the propoeal submitted by the telecommunications industry duting the San Fmncisoo
meeting. ThaI is, CoIJgress should recotnmeIl<I by resolution refunnation ofCQIDplicated and
substantial state and local telecommunications t a x e s . ,
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3, M.....t.rI.m Extenslo" (If aSked only)
The moratorium on Intemet access taxation should be made permanQnt. What about the other
provisions (lIthe current moratorium? We will need to decide to what extent those provisions
shoulii be extended.
4. International Tariffs '
The Administration sUpports an extension of the current moratorium on customs duties on
electronic transmissions, willi a view of making this extension permanent at the earli~t ~ible
dale.
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DEPARTMENT OF THE TREASURY
WASH1NGTON
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September 14, 2000
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.$ISTANT SECRETARV
£
MEMORANDUM FOR GENE SPERLI!IIG
. TOMKALIL
FROM:
SUBJECT:
,JONATHANTALISMA
ACTING ASSISTANT S
ETARY (TAX POLICy)
Possible ~;Digital Divide" Tax Incentives
The foHowing summarizes our views on the "digital divide" tax proposals that you asked us to
review in your prior memo. ] apologize for the delay in responding to your request,
(I)
Corporate donations ofcomputers - expansion of Administration eroposaJ.-We support a
tempor~ry extension and expansion of current-law section 170(e )(6), as proposed in the
President's FY 2001 budget,through lune 30, 2004 (when the R&E credit is scheduled 10
expire). Even so, we appose the New Millennium Classroom Act (H.R. 2308 and S. 542) as .
introduced. However, there are some features of the congressional proposals that we could
support building into the President's proposals. As part of a temporary extensimi of section
170(e)(6}, we could support the following proposals:
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(al providing that the enhanced deduction under section 170(0)(6) could be claimed for
computers that are up to three years old (starting from the date of manufacture or
acquisition by the taxpayer, but not allowing the "clock to be restarted" by re
acquisition of a compuler by lhe donor), provided timl- as proposed by NEA - the
donated computers meet the minimum standards prescribed by Treasury. which
wuuld reflect the mid-point perfonnance standard of industry sales for Ihrce-year-old
computers);
(b) allowing the enhanced deduction under section 170(e)(6) 10 be claimed by a corporate
donor which fewacquires a computer which it'previousiy sold to a customer (i.e., in
the case ofa re-acquisition, the original use of the donated computer need not be by
tile: donor or the donee)1 provided that the computer is not more than three years old
'on the date of donation;
(0) expanding eligible donors under sections 170(e)(3), (e)(4), and (e)(6) to include all
taxpayers (not merely C corps as under current law), but limit the enhanced deduction
. to l00tt of business income (consistent with the current-law rule for C corps);
(d) expanding the class of eligible donees under section 170(e)(6) to include not only
public libraries and community technology centers located in low~jncome
communities (as under the President's FY 2001 budget) bUl also any charity, no
matter where locate~ that is oTganized and operated primarily for purposes of
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providing computers without charge to lower-income families (as proposed by Mr.
Jefferson in H.R. 4061); and
ee) clarifying that, in cases where a business taxpayer's adjusted basis in property of any
kind (not merely computers) exceeds the property's fair market value, the taxpayer
may abandon the property for purposes ofsection 165 (and thereby claim an
abandonment loss equal to the property's adjusted basis) by giving the property to
charity, In some cases, current law is not clear ",,-bether a business taxpayer is entitled
to claim a higher deduction by throwing away used property than by donating it to
charity.
We do not support the proposals to increase the amount of the enhanced deduction allowed
under se<:tion 170(e)(6) or to 3110w taxpayers to claim a credit in lieu
an enhanced
deduction. It would set a bad precedent to allow taxpayers to claim a charitable contribution
deduction for unrecognized. built-in ordinary income beyond that allowed by the current-law
, rules. Moreover, although we have .examined a proposal to repeal the 'ltwice basis"
limitation of section 170(e)(6), we understand that this limitation rarely comes intO play with
donations of computers (most of which have a high basis 'relative to the property's fair.
or
market value.
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(2) Workplat:e literacy and computer training tax credit-expansion of Administration
proposal. We continue to oppose the congressional "IT Training Credif' proposal from last
year (which would provide a credit for virtually all employer-provided technology training
expenses that would be incurred in any event). However~ we support expansion of the
Adminisiration;s proposed 200/0 workplace literacy and leclmology trairring credit, so that
the credit would be available not only for training expenses incurred for employees who lack
a high school degree - as originally proposed - but also for training of employees who are
(or had been dwing the last five years) eligible employees for purposes of the work
opportunity tax credit or the welfare~to-work credit. We do not, however, think it is
appropriate to provide a special credit for technology. training provided to all low-wage
employees, because defining l'low~wage employees" in a way that the IRS could enforce
would be very difficult. especially in the case of part-time workers.
You suggest clarifying the Administration's proposal so that it includes not only baSlC
computer skilts but "the kind of skilts identified in the Coruad [IT TraJningj bill." We
believe that all computer skills training for eligi!>le employees generaJly would be covered
bY the Administration's proposal, provided tha~ computer skills instruction is or "broad
applica!>ility." We could, however, modify the Administration's proposal so that, as long as
. the computer training is provided to an eligible employee and the training is of broad
applicability (as opposed to being for n particularveru!or's product), there would be no need
to inquire as to whether t~e computer training was for "basic; entry~level cQmputer skills" or
for more advanced computer skills.,
(3) Credit for sponsorship of qualified 7.nne academies and tethnology centers.-The current
Administration proposal provides for an allocated credit, which would be allocated for each
designated empowennent zone and enterprise community by the local governmental agency
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�with responsibility for implementing the s.trategic plan that the area was required to agree to
as part of the empowerment zone (or enterprise community) designation process. Ifwe
wanted this proposed credit also to be available for sponsorship of public schools or .
technology centers outside ofdesignated empowennenf zones or enterprise communities, we
couM also authorize the State's departrnent of education (or any other agency designated by
each State's governor) to make aHocations ofcredits for up to $X ofsponsorship payments to
any K-12 public school or nonprofit oommunity technology center located anywhere in the
State (or perhaps anywhere in the State outside ofan empowerment 7.one -or enterprise
community? which would continue to receive a separate credit allocation) .
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If a separate State·wide allocation were to be provided for, we would have to decide whether
the State-wide allocation should vary based on each State's total population (or their
.respective populations below the poverty line, as Vlith the currentFlaw QZAB allocation
regime, see sec. 1397E(c)(2», and whether any adjustment should be made based on the
number ofdesignated empowennent zones or enterprise communities in each State .
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. With respect to this particular expansion of the Administration's proposal, we recently spoke
to staff or Mr. Rangel. who was the original sponsor of this proposal. Mr. Rangel's staff
suggested that a statewide allocation be limited so that it could be used only for corporate
spol15Orship of public schools that are eligible for QZABs (i.e., at least 35 percent of students
are eligible for subsidized lunches). Mr, Rangel's office is concerned that, if there is a
limited a'l1ount of corporate sponsorship money available. in expansion of the proposal to
all public schools could decrease the likelihood that needier schools will receive corporate
sponsorship payments, In addition, we may need to consider whether the proposal should be
expanded to the so-called "Renewal Communities/' which are to be designated under the
New Markets agreement reached by the President and Speaker Hastert.
Employer-provided computers and internet access.-We are concerned about the precedent
of providing tax~free treatment for employer provided computers~ as proposed by the Digital
Divide Access to Technology Act of2000 (H.R. 4274), which was introduced by'Jerry
Weller and John Le"is on April 13, 2000. There would be more than incidental personal
benefits for many employees, as well as their family members, under such an employer
provided program) yet (as discussed further below) there are no efficiency gains that could
justify a tax preference for consumption of goods such as computers through an employer
based system.
Although there is some uncertainty regarding the tax treatment under current-law rules of
employer-provided computers and internet access in certain situations, a preliminary
estimate by Joint Committee is that H.R. 4274 would cost approximately $1.5 billion over
the five-year budget wjndow~ which exceeds the cost of the Administrati()n~s entire OIdigital
divide" package in its FY 2001 budget.
H.R. 4274would provide tax-free treatment for employer-provided computers .(with certain
dollar caps) and internet access (without any dollar cap) for use by an employee and anyone
else who resides in the employee's home. Proponents of the bill argue that it would simplify
tax administration, by eiiminating the necessity under current law to determine on an
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employee-by-employee basis whether an employer-provided computer andlor internet access
is a non-taxable fringe benefit because it 15 sufficiently related to each employee's cutTent
job position. (This current~law test is most easily met by professionals, who also tend to
have higher'incomes.) Moreover; proponents argue that the proposal could be viewed as an
expansion of section 121 to pro~te computer literacy. Current1y, section 127 allows
employers to,provide tax:~free educational assistance (including payments for tuition,
equipment, and supplies) to their employees, but section 127 does!!2! apply to "tools and
supplies which may be retained by the employee after complet~on of a course of instruction,"
However, in the case of employer~provided computers, there may not be any formal course
of instruction for the employee, even though the item being provided by the employer has
obvious personallrecreational uses. For example, Ford Motor Company pJans on atl~wjng
aU 350,000 of its employees to lease a home computer from Ford (and be provided internet
access at home) for $5 per month, without regard to the whether the etriployee already is.
"computer literate or whether he/she uses the computer wleIy for personal reasons or as part
of a structured educational program. Industry representatives claim that there would be
efficiency gains because rank*and-file workers win be using computerized equipment more
and more over time, so using a computer at home would improve their skills at work. But
there is no evidence tbat employees will acquire significant job skills from having a
computer and internet access at borne. Indeed, there is no guarantee that employees (as
opposed 10 others in the household) will even use their home wrnputers', Ford says that their
unions have rejected any requirement that employees use their home computers for any
work-related purposes, such as reading email messages. Thus, there is no evidence for an
efficiency gain from mere, access to home computers or the internet that could justifY a tax
preference. in contrast to other employer~provided fringe benefits such as health insurance or
retirement benefits ..
Putting aside for the moment the general issue of whether we support H.R. 4214, your memo
suggests modifications to the introduced bill. Specifically, you suggest that H.R, 4274 be
modified to explicitly inclode employer-provided broadband Internet access and that the tax
free treatment under the bill be increased from $35 to $60 per month to oover·both
broadband Internet access plus computer rental. We do not think that these suggested
modifications to H.R. 4274 are necessary. First, the introduced bill already covers
employer-provided Internet accessl regardless of whether such access is "broadband» or not l
so long as the Internet access is "made available to substantia1ly aU employees of the
employer on substantially the same basis" (other than part-time or seasonal employees or
those who work outside the U,S,), Second, the $35 per-month cap contained in the
introduced bill does not apply to Internet access of any kind, but rather applies only to the
rental value of the computer itself when ownership is not transferred to the employee.
(Under the introduced biJI, when ownership of the computer is transferred to the employee,
the exclusion per employee is limited to an aggregate amount of $1,260 every three years.)
The introduced bill contains no dotlar cap on the value of employer~provided Internet access)
so there is no need to take into aCCOtUlt that broadband internet access is more expensive.
You also suggest that H.R. 4274 be modified to cover arrangements under which an
employer leases a computer (which is then loaned to an employee) rather than transferring
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ownershlp of the computer to the employee, Again. such a modification is not necessary,
because the introduced bill already provides for such arrangements.
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(5) Computer purchases by ElrC recipients.-We oppose Rep. Jefferson's proposal
(which is part ofH.R. 4061) to allow individuals who are eligible to claim the Elrc for a
taxable year to also claim a $500 refundable tax'credit for 50~percent of the costs they incur
to purchase computer equipment or software capable of providing Internet access, Although
narrowly targeted in terms of the taxpayers eligible to claim the new credit, the proposal
would raise serious policy and administrative concerns. First, the proposed tax credit would
be of little help to the lowest income households, because the refundable credit would not be
received u~til after a tax return i,s filed after the year in which the computer must be
purchased.. Second, it would be difficult for the IRS to verify whether a taxpayer's claim of
the credit is valid. without imposing significant reponing burdens on businesses that sen
. computers and software. Further, even if an information reporting system were established,
it would be difficult for the IRS to ensure that qualifying individuals did not use the credit to
purchase computers that they would then sell to non-qualifYing persons. Finally, under the
introduced bill, taxpayers could repeatedly claim a credit year after year (e.g., by claiming to
purcbase .a computer one year, a new printer the next, and then software or an equipment
upgrade after that). In view of these problems, Treasury believes that a better approach is to
expand the EIrC a, proposed in the President's FY 2001 budget, which would provide low
income working families with additional resources (through advance payments made by the
employer) that could he used not only for computers, but also other educational expenses,oc.
other essentials, such as housing and child care.
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(6) Broadbend access.-We generally oppose tbe broadbend investment tax credit proposals
(beth S. 2321 and the draft Moynihan proposal). These proposals would provide a tax credit
for investment in broadband equipment, both to serve certain under~served geographic areas
and to provide an incentive for inve::.iment in more advanced b~oadband technology
regardless of the geograpbic areas to be served, As discussed in a more detailed memo
previously sent to you, we do not think that it is aPpropriate to provide a preference for one
type of Imernet technology over other technologies. Moreover, the proposals would raise
difficult administrative problems in trying to determine what portion ofinvestment actually
provides Internet access to persons residing in poor urban or rural areas, as opposed to the
equipment, although located in a targeted geographic area. providing access to persons to
located out,ide the targeted area. Moreover. the proposal would not help with the more
fundamental problem that many persons located in poor urban and rural areas cannot afford
Internet ac,cess.
(7) Teachertraining.-We oppose legislation (H.R. 1075) that would increase the cUrrent-law
Lifetime Learning credit rate to 50 percent~ but only for elementary and s~ndary school
teachers who incur outMof-pocket expenses 10 enroll in courses in which they rec~ive
"instruction on basic or advanced computer functions or computer software (including
educational software offered by a single institution) approved for such individual by such
local educational agency." provided that such the expenses are incurred "for the purposes of
integrating materials covered by such course into the courses taught in the elementary or
secondary dassroom." This proposal would further complicate the already complex Hope
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and Lifetime Learning credits, and would raise definitional issues and compliance problems
in attempting to verifY whether the technology training from a: particular course was intended
to be integrated into the teacher's curriculum, Under current law, expenses incurred for
technology training at a post-secondary institution are eligible for the Lifetime Learning
credit. which the Administration proposes to increase to 28% for aU students and courses.
We also oppose H.R. 1076, which would allow elementary and secondary school teachers to
claim a 100% credit (up to $2,000 lifetime cap) for costs incurred to purchase a computer,
related pt:ripherai equipment, .or sofn.-..'are (other than software primarily m;ed for
entertairunent), This proposal raises numerous compliance problems.
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April 1.0, 2.0.00 -- Draft
MEMORANDUM
TO:
JOHN PODESTA
GENE SPERLING
JACK LEW
CHUCK BRAIN
CC:
DAVID BEIER
SALLY KATZEN
FROM:
SARAH ROSEN W ARTELL
LISA KOUNTOUPES
JOEL WIGINTON
RE:
APPROVAL OF LETTER TO DIGITAL SIGNATURES
CONFEREES
ISSUE PRESENTED
We seek your approval of the attached draft letter from Secretaries Summers and Daley
to the Digital Signatures Conferees. The Conferees may have their first formal meeting
this Tuesday_ The letter was requested by Senate Democrats seeking the
Administration's endorsement of their views, reflected in a letter from a1145 Democratic
Senators to the Conferees (copy also attached). The Administration letter has completed
OMB clearance and does not require fannal West Wing clearance; however, we thought
this a good occasion to ensure you are comfortable with the current Administration's
strategy on this legislation.
The lettc:r to conferees indicates the Administration's support for removing legal barriers
to electronic commerce. Specifically, it states our support for both: (1) contract
formation provisions that ensure that contracts shall not be denied legal effect or
enforceability solely because electronic signatures or records were used in their
fOlmation; and (2) appropriate records provisions regarding the legal validity of
electronic records (e.g., notices, disclosures, and other records retained in electronic
fonn). (Recall that, in the House, we supported an alternative without any records
provisions, volunteering only to work constructively to develop "appropriate
legislation. It) At the same time, the letter makes clear that there should be equivalent (but
not grea.ter) protections for consumers in the electronic world to those they have in paper
transactions. Finally, the letter endorses the five principles set forth in the Democratic
~enators' letter (which were developed in conjunction with the Administration) and notes
"that th(~ final legislation must incorporate [them] in order to gain Administration
support."
�The letter does not raise preemption issues, which are the p-rimary concern of State
Governors, Attorneys General, and Legislatures. Under the Uniform Electronic
Transactions Act (UETA). States have the authority to exclude certain consumer
protection requirements from their State law's coverage. California excluded many
requirements, especially iIi the insurance area, and it provoked industry to seek it
requirement in this Federal law that State law is entirely preempted unless the State
adopts LiETA exactly in the form adopted by the National Conference ofCommissioners
on Unifonn State Laws, The legislation also would bar States from imposing any record
retention requirements (i.e., mandating the form in which firms must retain their
electronic records for access by regulators), States have written letters. but have not yet
engaged effectively. We are sympathetic to their concerns,. but have limited leverage to
protect Federal requirements and. thus, cannot make preemption our fight.
The Senate Democratic letter was developed, in part, to increase the Administration's and
the Senate Democrats! leverage in conference. They sought to demonstrate Democratic
solidarity. Thus, they chose not to include language that some members had sought
(especially Senators Sarbanes and Leahy), but which others said reflected too high a bar.
The Democrats believe that a comparable statemen1 from the Administration is now
essential to maintain that leverage.
We worked closely v.ith Senator Daschle as the five principles jn the Democratic
Senators' letter were developed. Various approaches may work to satisfy these
objectivi~, The principles were reflected in.a draft of the biB released by Senator Wyden
and Leahy developed with our heavy assistance. We have discussedJhat draft:
extensively with industry representatives. ""'bile they have raised important technical
issues~ we believe that nnallanguage could be crafted that meets the Democrats'
principal,S and the industry's objectives in seeking legislation. We cannot provide
assurance, however, that Republicans active in the Conference Committee (especially
Senators Gramm, McCain, a.nd Abraham and Conference Chairman Bliley) wm be
willing to fully met these objectives. Jt\.nd we have rcason to believe that many Senate
Democrats, notwithstanding their letter, want to support the final conference product "
regardle!;s of how well it addresses these concerns, However, we believe this letter gives
us appropriate flexibility.
BACKGROUND
The Conference Committee will be made up nffive house members (3-2) and 17 Senate
members (10-7). Senator Abraham has had the lead in the Senate thus far and wants an
accomplishment this year. He and Senator !vIcCain seem open to at least some of the
ideas that are important to us, especially as some in industry argue that they" shoul~
accomm,date our concerns in order to quickly com.plete this conference. Senator Wyden
wants a bill) but the other lead Senators - Hollings, Sarbanes, and Leahy - may seek
more ch<Ulges than the traffic will bear and criticize us for insisting on 100 iittle.
Chainnan Bli1ey seems open to resolving the legislation amicably. but clearly wants
ownersh[p; Representative Markey wants to help us find a way to get changes that are
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important to us (despite his support for the House legislation in its current fonn) but will
not fall on his sword if unsuccessful. There is no conferee whose illterests are perfectly
aligned with ours, although Wyden and Markey are closest. Both would put up little
resistance ifsirnply presented with the House bill, but both seek improvements aimed at
addressing reasonable consumer concerns.
No one is sure what role Senator Gramm will play. Hollings and Leahy staff report that
they are working cooperatively with the other Republicans, but Gramm is absolutely
unwilling to consider the ideas that the Senate Democrats are promoting, even where
industry seems willing or even enthusiastic. Reportedly, he has chastised lobbyists fo~
even, talking to the Democrats and the Administration. Gramm and Abraham have
released a set or principles of their own and are said to have a draft bill. While it is
reportedly similar to the House bill in many ways, they are insisting that it is far superior.
Thus, even if agreement is reached with industry, an agreement with the Conferees - or at
least with Gramm. -- may be difficult to obtain.
The Administration's primary objectives are to get changes made to the House bill to
accomplish the following goals (in order of priority). We recognize that we will be
unable to get all of our concerns met and are already working on alternative language
where concerns have been raise4 by industry. We hope to convince a Republican (ideally
Bliley in consort with Markey) to offer much of our revised approach as a compromise.
If advanc.ed by a Democrat, it will not survive.
1. Enhance legal certainty and avoid unnecessary litigation by authorizing
regulators to provide interpretive guidance.
House bill: The bill is self-executing. As s'uch, no agency has the ability to interpret its
provisions. Moreover, agencies' ability to interpret statutes, under which they have .
regulatory authority, as modified by this bill, is unclear. So, for example, if a statute
requires that a disclosure be provided at a particular time. in a particular form, and it is
now provided electronically, questions can arise whether or not the time and fonn
requirements have been met or were modified in some way by this act.
Proposal: We argued that interpretive authority is essential, both to prevent creative
interpretations that allow predatory'practices, and to provide industry certalnty. Without
it, they might face class action lawsuits by parties alleging that requirements of
underlying statutes were not met.
Industry response: Industry is supportive, provided language is clear that interpretations
cannot create exceptions to the Act's requirements. They also seek language encouraging
regulators to adopt consistent interpretations. These changes are fine.
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2. Ensure Effective Consumer Consent to the Replacement of Paper Notices with
Electronic Notices.
House bill: Provides that, if a statute requires that a notice or disclosure be in writing,
that requirement can be satisfied by an electronic record (e.g., e-mail, or posting the
notice on a website), if the consumer affirmatively consents, after being notified of the
hardware and software requirements for access to and retention ofthe record. Moreover,
the House bill creates an affirmative obligation (not imposed in the paper world) for the
consumer to notify the provider of any change in their email or electronic location.
Proposal: To ensure equivalent treatment, we propose to eliminate the new duties for
the consumer. Moreover, we recommend that the consumer be infonned of the specific
types of records that they are consenting to receive electronically and the right to receive
the record in paper (if the have the right under law and the business gives that as an
option), And we propose that the consumer's consent be' provided electronically from the
same email account or other electronic method of access, so as to demonstrate that the
consumer has the capacity to receive notices electronically, For most consumers, a
recitation of necessary hardware and software requirements will be confusing; many
could consent when in fact they would be unable to access their own records, We also'
propose that, if the company changes its technology requirements so there is a material'
risk the consumer will be unable to read the notices, a new consent must be obtained.
Industry Response: While some complain about the burden, most acknowledge this
would create a more effective fonn of consent. However, technical issues hav~ been
raised about ensuring this works not only for email accounts but also for web-based
transactions. We think we can draft alternative language to resolve that concern.
Industry also complains about the burden of obtaining new consents and we are far less
likely to get much on that issue.
3, Ensure that Electronic Records are Accurate and Relevant Parties Can Retain
and Access them.
House bill: Says that, if a statute requires that contract or record be retained, the
requirem,;:nt can be met by retaining an electronic record, ifit accurately reflects the
information in the contract or record and remains accessible for as long as the statute
requues,
Proposal: We suggest technical changes to ensure the information is accessible to the
consumer and others entitled by law, not just to the company. We are also concerned that
some technologies may make it impossible to detennine whether or not something is an
accurate version of the original record, but we recognize that nothing could be guaranteed
to be "unalterable." So we propose a middle ground: the record should be preseIVed in a
fonn that "provides assurances of the accuracy and integrity of the .,. record substantially
equivalent" to those assurances provided by a written record." Thus technology could
adapt.
.,
\
4
�Industry response: Technical d:·a~ring issues but no substantive objection,
4. Avoid unintended consequences in areas outside the scope of the bill by
pro'\'iding dear federal regulatory authority for records not covered by the bill's
"consumer" provisions.
House bill: 'While most of the attention has been given to bill provisions that affect
consumer transactions. there are other cases where federal law establishes requirements
for notices and disclosures provided between private parties. For example, workplace
safety and hazardous waste transportation notices.
"
Proposal: We propose that federal agencies be able to supercede the bill's requirements
jf they affinnatively act. after passage of this law, because they believe that electronic
delivery could undennine the intention of the underlying requirement. Thus, OSHA
could act issue new regUlations requiring that hazard notices be physically posted in
certain places~ because electronic notice would not suffice for safety purposes,
Indutry response: No objection raised thus far, although we expect they may request
that then~ be some standard met before agencies can supercede the hill's requirements,
Alternatively, the Gramm-Abraham draft may address the problem by narrowing the
.
scope of the bill to not cover these types of notices,
S. Avoid facilitating predatory or unlawful practices.
House bill: No specific provisions, Consumer groups are especially worried about
predatQ!)1 lenders and scam artist. They fear they will bring II; laptop into the home of a
vulnerable person and trick or coerce them into foregoing the right to receive paper
records and notices that might warn them against the transaction or at least provide it way
to trace the scam after the fact. Too many ofthese people may not have computers of
their own and will neve~ have lhe ability to access and retain the records they "receive"
electronically.
Proposal: We would take some so~ace from the availabifity of interpretative authority
and tbe requirement that the consent be provided using the same email account or other
mechanism to which notices win be sent, demonstrating consumer access. The Wyden
Leahy draft also contained a provision that would make a consumer's consent inef(ective
if induced in an unfair or deceptive marmer.
Industry response: The industry violently opposes the Wyden-Leahy language, which
they view as creating new '~unfair and deceptive acts and practices" (UDAP) authority.
(Under current law, Federal banks and thrifts are only subject to UDAP ifthe Federal
Reserve first dctennlnes that a practice is unfair and deceptive, They never have.) We
will propose instead a savings clause, clarifying that nothing in this bill affects any
existing federal or'state UDAP authority. But this will be most difficult to get and we
may need to simply argue t1m! the interpretive authority gives us: the ability to protect
against predatory practices.
5
�i
6.
Otbcr~
Federal Government Interests: We also proposed changes. to: (1) ensure that the SEC
retains authority to impose requirements necessary to protecl investors~ (2) exempts
federal government contracts; (3) allows the Federal government to impose requirements
for contnlcts that it guarantee..:;; and (4) preserves federal record keeping and other
requirements., when implemented by the states, as under the environmental laws. We
have received no objections to these provisions. although we suspect that there wiIJ be a
fight about the SEC issue, in which Ule SEC will have to engage.
,
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6
�4ZI0001!OOUfj
10 / 05(00
lO:U
,,
U.S. TREASURY DEPARTMENT
STUART E. EIZENSTAT
DEPUTY SECRETARY
.~
V
PACSIMILE 1'IlANSMITl'AL SH£)l.T
=
TO:
PROM:
GENE SPERLINC
DAVID BEIER
,
PAX NUMBERl
456- 2878
COMPANY.
DEPUTY SECRETARY EIZENSTAT
DATil;
4,56-6231
OCTOBER 5, 2000
TOTAL NO, 01' PAGES~~-
(INCUJI>!NG COVER):
5
SENDER'S PHONE NUMBER:
PHONE NUMBER:
202-622-1080
--.~~~~--------~~~~.----
SUBJECT:
INTERNET TAX
o URGENT
o FOR REVIIlW
o PLEASE REPLY
o PLEASE COMMENT
o PLEASE RECYCLE
·NOTES/COMMENTS,
PHONI!. 202 61Z·1010 • FAX. lOt
nz·con
,
\
�10/0$/00
!iJOOO2/000S
10;41
',;;;t..
0,'
THE DEPUTY SECRETARY of THE TREASURY
WASHINGTON
October 5, 2000
MEMORANDUM FOR GE...,'E SPERLING
Assistant to tflc President for Economic Policy
DAVID BEIER
Chief Domestic Policy Advisor
Office of tl1e Vice President
'
FROM:
Stuart E: Eizenst1lt
SUBJECT:
InremetT..
1 arry writing to share some information regarding Internet tax legislation and to raise some
questions that we might want to consider about how to move forward on this issue.
Chuck Marr told me and others at Treasury that Senator Dascbte is absolutcly opposed to any
extension of the moratorium at this time, a
me.~$Uge
Chuck said he conveyed to the White House
as well.
Senator Daschle's position W1i$ also conveyed to me today during a meeting with PeLer Lowy
and Lisa Cowell of tile E~Faimcss Coalition. 'Their position is that the be..<.;t course of action
would be for there (() be no rntemet tAA legislation passed thIS year, They asked that we oppose
any Congressional proposal to' adopt all extension of the moratorium. even a two-year extension,
which we had supported in !he spring. They expressed tl1e ,iev; that the S:atcs have made
significant progress On tax simplifiClltion and that senators Dorgan and McCain are very close to
a~ment on a bill authori:z:ing the States to enter into a compacL They bclieve that the parties
are being motivated to act by the threat of a "rree~for-all" when the llior.ucrium ends in Oetober
2001, and th,~y fear that this momentUm will be stymied by ~ny extension of !he moratorium,
On Wednesday. September 20, 1 met with Senators Graham and .Enzi on this issue, and they also
expressed their QPpositiO'n to an)' extension of the moratorium. Senator OTahl1ll1 said that any
extension of the JTlO1'.'tltorium was the "equivalent of surrender:~ He said he viewed it as: a "big ,
gift" to In!¢met retail... and strongly encouraged the Administration to exact> "quid pro quo" if
it supports a tw!ryear extension. He said £hat. in his view. the Administration has enormous
power on rhis issue to influence the final outcome. Senator Enzi expressed the belief thai the
failure (() extend the moratorium will provide an incentive to stale and local governments to
en.ct simplified and streamlined sales tax legislation.
1 informed the Senators that we would consider their suggestion regarding a quid pro quo, but
rmlde no commitments. For example., one possibility might be to include language in the
.
.
(
lcM
�!4I0003;0005
,
extension that would require expedited Congre.~sional review of State simplification effons for
-
'.
the pl,Jrpose of determining: whether States may imp<>se a tax coUection obligation on remote,
including hlternet. sellers.
I
1» both meetings. 1 articulated the Administration*s position that lYe support a shorHerm. lw!)~
year extension of the moratorium. thron h October
3 but 0
se Ion ~lenn e tensions such'
as the hve-year extensIon contatn In the bill passed by the HOlJse earlier this year. I also took
this opportunittyto explain our opp~tion to Internet acce.<ts taxes and to the European
Gommisston's At proposal.
~
I believe. however. that there is merit to the
liment that an e
sion of the moratorium rna
notbe rudentatth" .
a sitionw tdnot
conflict with the existing Administration position, as we could still support the adoption of a
two~ ear muratoriom extension next ear when the CUJTent moratorium 1S about to expire. In
other wor s, we might state that it is (00 early to commit to an extenslon
'me
because the States and Congress ate making significant prog~s!>, \Vhen the moratorium is about
to expire next October and we have more informati,on about whether simplification efforts have
been suc'cessfu!. we could at that time support a two-year extension of tbe moratorium. Since the
moratorium extension does nOE take effect until October 2001, we could argue that there ill no
reason to rush 1l) judgment now.
1 suggest that we scbedul~ting or phone call to discuss these issues shortly, I would
appreciate hearing your thoughts so [ can gefoack to me Se:natill'R anti tnt'! CoruitUm tnemtrul s.
am also enclosing a memorandum on Ihc issues the SCUl'tQn; Rlised,
,
,
Enclosure
2
+
�10/05/00
,
I€ } 0004/0005
10:41
Memorandum 'on Internet Tax Issues
Senators Graham and Enzl asked us to examine several isSues regarding 'Internet tax and the
mora.rcrium pending on the Hill,
Congress lias the legal aut~(Jrlty to authorize States to collect tax from remote scllerSt bat is
not likely to cxercl~ It. In Quill V. NQah DakMa,-#Ie Supreme Court found that requiring
remote sellers [0 collect use tax placed a burden on interstate conuncrce that violated the
Commerce CIa.," or the Constitutibn, That "'ling was based primarily on the Court's fmding
that the bur-den came fom aD extraQ~iAiUiJ¥ CQmpleK syg~A1 of state and local sales and'.use tax.
J
Because th~: Commerce Clause is on~ of the "reserved power" clauses. ConiJNS bW omlhQrity
over [he issue (as op~ say, to the Due Process Clause,. which Q):ngress does'notliavc the
power to override). Therefore. <;ongress can act to allow the States to do what would otherwise
be unconstitutional in the absence of Congressional action, In this case. Congress cou1d act to·
authorize the States to itnpt)s~ a tax collection obligation on remote ~llers, regardless of whether
the States take ~r action toward siMplifiCation of the.tr existing laws. ._
Thus. there are two ways that the States can get tile power to impose collection obligations on
remote sen~'fs. (I) Congress could enact legislation giving the' Slatt:.<). the authority to do so; or
(2) the States could frimpl1fy their sales and tax systems to stich an extent tbal the Court wc;llid
find the obligation toooUect no longer imposes an impermbsible burden on interstate commerce
pursuant to Quill.
Both Michael Mundaca and Frank Toohey agree that there is Ii.ttle chance Congress would grant
the StateS the authority to impose coHection obligations on remote sellers. formet Senator
Bumpers tried for many years: to persuade his. Senate colleagues to overturn Quill without
success. His legislation never received more than 25 votes on the Sena.te floor. Senator Dorgan
has met wllh even less success in his similar effort'S. He was never able to persuade his fonner
colleagues on the House Ways and Means Committee to vote to overturn Quill, an~ has been
equally unsuccessful in the Senate.
Recognizing that there is little cha1too of 9ongress' overturning Quill., the States a.re moving to _
ToUId remain
simplify their m.x. systems. Nevertheless, the legal status of a simplifted system
uncertain and subject to challenge, Thus, once their tax systems are simplified. the StatC-1iI wiU
have two choices: (1) to impose the obligation, WlIlt for a leg.1 challenge and Jet the Courts ",Ie
again; or (2) to go back t"Congress and argue thotC.ogress should now give States the
authotity to force collections because the simplified tax laws represent a change in
circumstances,
Pursuing tbe Uniform Con:une..c~ Code approach entails some risks far the States.
In their effOlts to sj~l'tify' their~remotc seller tax re~~ States are seeking unifonnity of
their laws. However. the ConstitutiOn prohiliits"~ iromjoining together on issues related .
to interstate corruneroe, Thus, [he States have two options [0 wod together to solve common
issues:
�,
Ht/05/0U
10: t l
t. They can get Congress to authorize thl; States to fonn compacts. Congress, for example,
authorized the States to organize regional compacts to' resolve the issues relaled to the
disposition of low-level nuclear waste material; or
2. They can join together to develop'a model statule thaI all would be free modify and adopt.
No penalties, however. could be imposed for failure to adopt them.
The states are CUl1'eI\(ly pursuing the model statute option through the Strearnlincd Sales Tax.
Project. which is an attempt to develop a model law to simplify sales tax administration and
collection. similar to tho process followed years ago to develop Ihe Unifonn Commercial Code
("U.C.<;;.").
The risk with this approach i. thot. unlike with the UCC. only a few Slates may choose 10 a<lopt
these new standards or those that do may amend them so much during their legistanvr; process
that much of the simplicity is lost AMther risk is that any model statute ndopted by the States
may not simplify the law $1,lfficiently for the COUrt$ to overturn existing Jaw Of for Congress to
mke action. .
Congress.can help tbe States to avoid some of~e potential pitfalls ifit ncts
DOW,
in
conjunction with extending the moratorium. to authoriU! the States to form a compact under
which they would be able to develop uniform laws for the collection of taxes 01\ remote sellers
and/or to set terms under wbich the compact could impose taxes without further Congressional
action. This scenario would enable Congress to set the terms of the compact now and could
avoid the need for separate legislation to authorize the State.<; to oollecllaxe.ti.
It is unlikely that the Administration win be able to extrart a "quid pro quo," It may be
because of the risks associated with the cummt mUlti-scirc effort unde'rWay that Graham is
seeking n "quid pro quo. h
.
Both Mike and Frank believe that Graham is mistaken if he believe>; the Administmtion can
extract a OOl":cession for a moratorium extension. If it W~ possible, sueh a COilceSslQll might
take one of two fonns:
1. The moratorium extension might include language that would require expedited
Congressional review of State simplification efforts for the purpose of determining wh.ether
States may impose a tax colk;ction obligation on remote st:Hen:~ or
2. Alternatively. it might include language In the extension that would enable the states to
implement wh.tever simplification plan they develop without further Congressional a~on,
Sdl~
Mike and Fmnk do not believe either option is politically feasible.
2
�THE WHITE HOUSe:
WASHINGTO!'i
February 6,1998
MEMORANDUM FOR THE PRESIDENT
From:
Gene Sperling
tAl s:
Director, National ~omic Council
Mtckey [bam
"\(At?
Director, [ntergovernmenta,~,)ffairs
, 1-"
Lawrence H, Summers .~
Deputy Secretary of the Treasury
Internet Tax Freedom Act (Cox~ Wyden Legislation)
ACTION FORCING EVENT
Congress is currently considering legislation {The Internet Tax Freedom Act, S. 442, H. 1054) introduced
by Senator Ron Wyden (D- OR) and Congressman Chris Cox. (R~ CA) to impose a moratorium on new or
discriminatory state taxation of the Internet. The legislation provides Jor a study process to develop
policy recommendations and is aimed at permitting electronic commerce to develop free of distortionary
taxes imposed by myriad jurisdictions. It is based on principles set forth in a Treasury pohey paper> in
the July 1, 1997 Framework/or Global Electronic Commerce and in your Presidential Memorandum on
electronic commerce and is consistent with tbe position we have taken in international discussions,
Industry, not surprisingly, strongly supports the bill. Earlier this year, seven CEOs belonging to the
Computer Systems Policy Projec't, including Lou Gerstner of IBM. Lew Platt of Hewlett Packard and
Lar~, ~1~rg ofNeR met with Secretary Rubin and Deputy Secretary Summers to urge full support.
;,
State and local groups such as the National Governors' Association, the US Conference of Mayors,
NACO, the National League of Cities as well ~s elected officials, however. strongly oppose the bill as
usurping their ability to tax (though officials from high tech states such as Governors Wilson, Pataki and
Cellucci support it.) Opponents have been slow to identify specific problems that might be fixed but cite
lost sales tax revenues if on-tine sales cut into store sales that would generate taxes. They are concerned
that while consumers are Hable for taxes on mail-order sales, those taxes are rarely collected. State and
local groups have said that the legislation "will lead to Main Street stores and small businesses ... across
America being forced to close due to the discriminatory impact of a sales tax levied unly on retail stores.
not their lntemet competitors." In view of the federalism issue, last summer, Deputy Secretary Summers
testified in favor of the bill's goals and principles but stopped short of endorsing it. ~rher this month. he
proposed to the Big Seven state and local organizations that we workjointiy on a bill that addresses their
concerns. They declined the offcr while suggesting that we continue to talk, The Big Seven rejected the
offer because they believe that they can continue to delay or kill the legislation, and are not motivated to
I
�•
work with us until it is absolutely necessary.
On November 4, 1997, the Senate Commerce Committee reported out a bill. We understand that the
Senate will wait for the House. OUf active support is likely to help the bill and satisfy high tech
proponents while 'withholding support would partially satisfy state and local groups. Your guidance is
sought on whether to take a more active position in support of the bill and therefore take credit for its
passage or continue to maintain a low profile. A strong announcement of support eady this session
would probably carry the most weight. IGA would prefer that we wait until mid· March, to avoid
needlessly antagonizing the Big Seven groups, who will be having meetings in February and early March.
OPTIONS
A.
Actively support the legislation while soliciting state and local views in order to address any
flaws and legitimate concerns
. This option will give us the opportunity to take credit for an anti-tax initiative that will be
beneficial to·the development of electronic commerce. From an economic point of view,
preventing new taxes on a network that provides so many public benefits is good policy. The
Senate version has been improved to where Treasury's Office of Tax Policy now feels we can
support it, though some technical and substantive problems remain. This option will initially
increase pressure from state and local opponents. However, as the legislation moves forward,
opponents are likely to increasingly value our offer to use our offices to address their remaining
conc(:rns.
•
B.
Continue current posture (support goals and principles without endorsing legislation)
This option while frustrating high tech proponents would initially do more to satisfy state and
local concerns and might lead to the bill's failing to pass: However, if the bill passes in its current
form, anything short of a veto will still upset state and local opponents. Ifwe take a lower
profile, we will also have less influence to improve the bill.
RECOMMENDATION: Your economic and political advisors (Treasury, Commerce, NEC, IGA, OMB,
and Ira Magaziner) recommend Option A. They believe this legislation will foster electronic commerce
which is emerging as an important engine of growth while preserving our ability to address the legitimate
concerns of state and local governments. Withholding support may cause the legislation to fail, or if it .
passes anyway, subject us to strong pressure to veto a bill that we believe merits support.
Agreed
_Disagreed
Let's Discuss
BACKGROUND AND ANALYSIS
The Internet Tax Freedom Act would permit states to continue to collect existing, non-discriminatory
taxes but imposes a moratorium on new or discriminatory ones and calls for a study process. Both bills
call for you to appoint a commission representing the states, industry and the Administration, which will·
then issue recommendations which you may submit to Congress. The current Senate version of the bill
ends the moratorium in approximately five years on January 1, 2004, which we think is appropriate.
•
2
�'.
The Admmistration's Actions So Far
Treasury first set forth the principle of tax neutrality for the [ntemet at the intemationallevel in its paper,
Selected Tax Policy Implications a/Global Electronic Commerce, released in November 1996. That goal
was adopted by the sponsors of this legislation. '
Deputy Secretary of the Treasury Summers testified last summer in favor of the goals and principles of
the legis1ation but. at that early stage, stopped short of endorsing it In his testimony, he set forth three
guiding principles: first, that commercial activities conducted by means of the Internet should not be
subjected to new or discriminatory tuxes; second. that the Internet should no! become u tax haven; and
third, that we should be highly sensitive to concttms about federalism. In short, we supported techno!ogy
neutral, non-discriminatory. taxation of electronic commerce that preserved the state and local tax base.
The goal of tax neutrality was then mrorporated in the July I, 1997 paper, A FrameworkJor Global
Electronic Commerce and included in your July i, 1997 PresidentIal Memorandum on electronic
commerce. We have adhered to this principle in international and domestic tax policy discusslQfts.
Efforts to Address State and Local Concerns
With the exception of officials in high tech states such as Governors Pataki, Wilson and Cellucci, most
state and local officials oppose the legislation on the grounds that it inappropriately restricts their right to
tax. They are parHcularly concerned that rapid grov.ih in electronic commerce will come at the exper'lSe
of store sales and. if treated like mail order sales for tax purposes, will cut into sales tax revenues. In fact
tbe bill is silent on whether neutrality means neutrality with store sales where merchants must collect
"sales tax" or neutrality with mail order sales where consumers owe "use tax" but merchants are not
required to collect them. Nor does it addtess the thorny issues Qf~nexus" or where the sale takes place
for tax purposes,
•
As a practical matter, states wiH face the problem of how to collect tax on out-of-state Internet sales
whether the bill passes or not. The bill. as written. neither worsens nor solves their problem, Attempting
to solve it would probably mean addressing the complex issue of mail order taxation. Recently, a
pmposed deal between the Direct Marketing Association and several large states on the mail order issue
fell apart after strong negative reaction from mail order customers.
Since legislation was introduced. Treasury officials have met with ~he Multi-state Tax Commission. the
Big Seven group of state and local organizations representing elected officials, and others to address
SpeCific concerns. While s,tate officials generally expressed more interest in killing the bill than in
identifying,specific problems with the language of the bill, Treasury did communicate specific
suggestions we received, as well as our own concerns, to drafters who incorporated most of them in the
Senate bill. In January. Deputy Secretary Summers made an offer to representatives of the Big Seven
state and local organizations to work jointly on a bill addressing the states' larger remaining concerns,
However, after some consideration. they turned this offer down, prefening to work with Congress
dtrectly.
One idea that opponents have often raised is to flip the burdens of the bill around to ban specific taxes
during the moratorium rather than all taxes except those carved back in. This approach would require
industry to identify taxes it opposes rather than requiring the states to identify taxes they Wish to impose"
However, Treasury believes that since states and mun(c1palities best understand state and local tax Issues•
•
3
�••
they are betu:r positioned than industry to identify which taxes should be pennitted. We have not stated a
position publicly and we could refrain from expressing a view.
Other ideas opponents have raised include grand fathering all existing taxes and shortening the
moratorium. The bill already grandfathers some taxes. Treasury's Office of Tax Policy believes that if
the moratorium is significantly shortened, taxing authorities may choose to simply wait it out rather than
actively engage in the study process. Moreover, shortening the moratorium may leave insufficient time
for the study process to be effective.
Legislative
lfu1Qci
The bill was held up for many months by Senator Ted Stevens (R~ AK) over his desire, unrelated to the
tax aspects of the bill, to require the FCC to revisit requiring Internet Service Providers to pay into the
Universal Access Fund. On November 4, 1997, the Senate Commerce Committee reported out the bill by
a strong vote of 14 to 5. A request by the Senate Finance Committee to review the bill sequentially is
being considered by the Parliamentarian but a previous request was denied. The next action is likely to
occur in the House where Chris Cox believes supporters can move the bill out of the Commerce and
Judiciary commiriees.
•
•
In December 1997, Republican governors raised their concerns about the legislation to the Congressional
leadership. lbis has led to a dialog between Governor Leavitt (R- UT), the governors' point person on
this issue, and Congressman Cox on how to move forward. Cox is considering the states' proposal to
redraft the bill to declare a moratorium on specific taxes rather than all taxes except pennitted ones.
Industry has so far resisted this approach. The Senate is likely to move the bill to the floor only after it is
reported out in the House .
4
�!
'.. _
.
:-i 1
F.
~
,
i''''
.t"..!~~
: ~.
Smah Rosen Wartell
.."..,... 10/09/200003:54:39 PM
t
Record Type:
To:
Record
See the distribution list at the bottom of this message
cc:
Ruth M. SamardicklOPD/EOP@EOP
Subject: .!:uman Rights Watch and CARE ACT
Blue folder -- low priority
In regards to the letter you received from HR Watch urging us to push for CARE Act in proverbial
"endgame" perhaps on Minim,urn Wage, you wrote "seems like a heavy lift allhis point." .
Ruth and I spoke with Jo Becker of HR Watch and said the same very tactfully. We said we'd be
delighted if the bill were enacted. but given the current state of play, didn't see an obvious way to gel,il
down. Pointed oul that .- fe minimum wage -- Democrats are working hard to strip the bill of bad FLSA
provisions. Would be hard to conceive of Rs agreeing to put in a good FlSA provision except at the cost
of provisions that organized labor and other friends strongly oppose. I think the call ended well. She
understood we were ready to try to help but there wasn't a good way to do it -- but open to .ideas if they
had any. It was clear there was little understanding of the status of min wage (or lack thereof) so just
sharing seemed to help.
Message Sont To:
Gene B. SperJing/OPD/EOP@EOP
David Tseng/OPD/EOP@EOP
Elliott H. Baer/OPD/EOP@EOP
Joseph N. CriscilOPD/EOP@EOP
Christopher M. Wanken/OPDfEOP@EOP
Sylvia M. Vetlino/OPD/EOP@EOP
Amy Mall/OPD/EOP@EOP
�
Dublin Core
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Clinton Administration History Project
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Council of Economic Advisers
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An account of the resource
<p>The Clinton Administration History Project describes in detail the accomplishments of President Clinton's Administration for the period 1993-2001. The records consist of the histories of 32 agencies or departments within the Executive Branch. In general, each organization associated with the Project submitted a narrative history along with supporting documents. These narrative accounts are primarily overviews of the various missions, special projects, and accomplishments of the agencies. The supplementary records include substantive memos, press releases, briefing papers, and publications illustrated with photos and charts.</p>
<p>Agencies:<br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Council+of+Economic+Advisers&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Council of Economic Advisers</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Central+Intelligence+Agency&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Central Intelligence Agency</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Commerce&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Commerce</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+the+Interior&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of the Interior</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Defense&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Defense</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Corporation+for+National+Service&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Corporation for National Service</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Council+on+Environmental+Quality&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Council on Environmental Quality</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Justice&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Justice</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Domestic+Policy+Council&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Domestic Policy Council</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Education&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Education</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Energy&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Energy</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Environmental+Protection+Agency&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Environmental Protection Agency</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Federal+Emergency+Management+Agency&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Federal Emergency Management Agency</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+General+Services+Administration&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the General Services Administration</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Health+and+Human+Services&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Health and Human Services</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Housing+and+Urban+Development&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Housing and Urban Development</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Labor&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Labor</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+National+Economic+Council&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the National Economic Council</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Office+of+Management+and+Budget&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Office of Management and Budget</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Office+of+National+Drug+Control+Policy&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Office of National Drug Control Policy</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Office+of+Personnel+Management&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Office of Personnel Management</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Office+of+Science+and+Technology+Policy&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Office of Science and Technology Policy</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Office+of+the+Vice+President&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Office of the Vice President</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Small+Business+Administration&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Small Business Administration</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Social+Security+Administration&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Social Security Administration</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+State&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of State</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Transportation&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Transportation</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+the+Treasury&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of the Treasury</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+United+States+Agency+for+International+Development&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the United States Agency for International Development</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+United+States+Department+of+Agriculture&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the United States Department of Agriculture</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+United+States+Trade+Representative&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the United States Trade Representative</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Veterans+Affairs&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Veterans Affairs</a></p>
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="http://clinton.presidentiallibraries.us/items/show/36051">Collection Finding Aid</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
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Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
Extent
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1474 folders in 111 boxes
Text
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Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
NEC – E-Commerce
Creator
An entity primarily responsible for making the resource
History of the National Economic Council
Clinton Administration History Project
Date
A point or period of time associated with an event in the lifecycle of the resource
1993-2001
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 42
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/Systematic/Administration-History-finding-aid.pdf">Collection Finding Aid</a>
<a href="http://catalog.archives.gov/id/1497354">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Format
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Adobe Acrobat Document
Publisher
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Clinton Presidential Library & Museum
Medium
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Reproduction-Reference
Date Created
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6/24/2011
Source
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1497354-nec-e-commerce
1497354