Internet Taxation

The case describes the debate surrounding Internet taxation when H.R. 3709, the “Internet Non-Discrimination Act” was passed, on May 10, 2000. The act provided a five-year extension of an existing moratorium on new Internet taxes that had been due to expire in 2001. The bill had been embraced by a diverse coalition of consumer groups, Internet users, and high-tech companies that argued that the imposition of taxes on electronic commerce would slow both the development of the Internet and growth in the U.S. economy. To explore the debate, the case investigates precedents set by legislation concerning mail order sales, concerns of online and offline merchants, state and local governments’ fears of diminishing tax revenues, the federal government’s efforts at developing policy and legislation, interests of consumers and corporations (Amazon.com and Cisco Systems) and international initiatives to develop Internet-specific policies and taxes.