Federal Panel to Discuss Taxes on E-Commerce

The Advisory Commission on Electronic Commerce, a federal panel established last year to study whether taxes should be imposed on Internet transactions, is set to hold its first meeting today in Williamsburg, Va.

The commission was created by Congress last year when it passed a three-year moratorium on Internet taxes. But the panel’s first meeting was delayed for six months by a dispute over its composition.

Former Netscape Corp. Chief Executive Jim Barksdale was forced to step down from the commission in April after the National Assn. of Counties and the U.S. Conference of Mayors filed a suit accusing Congress of stacking the panel in favor of the high-tech industry.

Many state and local government officials see the tax moratorium as an unfair advantage for online businesses over traditional retailers, as well as a threat to a key source of tax revenue. Industry officials argue that imposing taxes on the Net would cripple the commercial growth of the new medium.

The chairman of the 19-member commission is James Gilmore, the Republican governor of Virginia. Other members include Dean Andal, chairman of the California Board of Equalization, and Robert Pittman, president of America Online Inc.