Net tax bill amended

The Senate loads up the Net tax act with online privacy protections for children and requirements to put government documents on the Net.

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The Senate today loaded up the Internet Tax Freedom Act with online privacy protections for children and requirements to put government documents on the Net, but a Senate Commerce Committee spokeswoman said a vote may not happen until Tuesday.

The amendments, adopted by a voice vote, include the Children's Online Privacy Protection Act by Sen. Richard Bryan (D-Nevada) and the Government Paperwork Elimination Act by Sen. Spencer Abraham (R-Michigan).

Bryan's amendment seeks to require parental consent before Internet sites can collect information online from children age 12 and under. The bill passed the Senate Commerce Committee yesterday.

Abraham's measure would require the government to post documents online and allow citizens to use digital signatures to sign forms. The legislation would give legal standing to digital signatures.

The Net Tax Freedom Act goes before the Senate again Monday and more amendments could be added then. Congress is slated to adjourn October 9.

There is speculation that two more controversial provisions also could be added to the bill: Sen. Dan Coats's (R-Indiana) legislation, the so-called CDA II, which would limit minors' access to adult content on the Net, and another that deals with a domain name registration tax.

Sources have said Senate majority leader Trent Lott (R-Mississippi) is working behind the scenes to push the provision that would reverse Congress's decision in May to retroactively approve up to $60 million in taxes collected in the form of Internet domain name registration fees. Congress already had pegged $23 million from the fund to continue to build the Next Generation Internet, a network spearheaded by consortium of universities and then adopted by the Clinton administration.

The Internet Tax Freedom was introduced by Sen. Ron Wyden (D-Oregon) to prohibit new or "discriminatory" taxes on Net access and e-commerce for at least two years.

A similar bill passed by the House in June would prohibit Net taxes for three years, and contains a controversial clause that "grandfathers" taxes on Net access or online services that were collected by states before March 1, 1998. Opponents of the grandfather clause say it could stifle revenues for budding e-commerce and online services by letting states and localities apply old tax codes--for telecommunications or utilities--to the Net.

The Senate bill would establish a 19-member body to recommend online tax policy. That commission would report in 18 months with recommendations.

"Now that this is on [Wyden's bill], hopefully we can eke it out before the end of session," said Patricia Murphy, a Bryan spokeswoman.

Meanwhile, the Senate thwarted an amendment proposed today by Sen. Dale Bumpers (D-Arkansas) that would have allowed states to require mail order catalog companies and e-commerce providers to collect taxes on shipments in their state.

Bumpers defended his measure as a way to protect local brick-and-mortar businesses from being undercut by out-of-state online retailers, but it died in a 66-29 vote.