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Harkin Letter - internet taxes TOM HARKIN IOWA (202) 224-3254 Fax (202) 224-9369 TTY (202) 224-4633 httpJ/h..i<'o.","'te.go' April 27, 2004 COMMITTEES AGRICULTURE APPROPRIATIONS HEALTH. EDUCATION, LABOR AND PENSIONS tinítrd ~tatrs ~matr WASHINGTON, DC 20510-1502 SMALL BUSINESS ,-, Michael Van Milligen City Manager's Office 50 West 13th street Dubuque, IA 52001 -" ::;¿ ~ Dear Michael: -' ::::' :> c~; <15 -.1 '-" !,) Thank you for contacting me. I am always glad to hear from you. I appreciate knowing of your views regarding Internet taxes. As you may know, the Internet Tax Freedom Act (ITFA) was signed into law in 1998 and provided that no new taxes specific to the Internet could be imposed by local governments until November 2003. Since the expiration of this law, we have not seen actions by states to move forward with new tax laws in this area. I am hopeful that the Senate will take this issue up for consideration soon. I think there is broad support for not taxing access to the Internet. Internet sales are potentially subject to more than 30,000 state and local taxing jurisdictions in this country. I am opposed to allowing special local government taxes on Internet access. One problem, however, is the definition of Internet access. Officials at the Iowa Department of Revenue, along with officials of many other sta.tes, believe that the definition in 5.150, The Internet Tax Non-Discrimination Act, could result in a large share of the telecommunications industry becoming exempt from local taxes. Iowa officials estimate they could lose about $50 million per year. I am hopeful that an appropriate solution to this problem will be found soon so that we can avoid taxing access to the Internet, while also avoiding serious fiscal damage to states and localities. . 150 RRST AVENUE. NE SUITE 370 CEDAR RAPIDS. IA 52401 (319) 365-4504 210 WAlliUT STREET 733 FEDERAL BUILDING DES MOINES, IA 50309 1515) 284-4574 1606 BRADY STREET SUITE 323 DAVENPORT, IA 52803 1563) 322-1338 350 WEST 6TH STREET 315 FEDERAL BUILDING DUBUQUE, IA 52001 (563) 582-2130 320 6TH STREET 110 FEDERAL BUILDING SIOUX CflY, IA 51101 (712) 252-1550 Again, thanks for sharing your views with me,. Please don' t hesitate to let me know how you feel on any issue that concerns you. Sincerely, 7IJn Tom Harkin United States Senator TH/jfw