All Quiet On The Administration Front
     So far, more than three dozen proposals have been sent to the commission, ranging from Gilmore's "no Net tax" plan to a proposal by commission member Gov. Michael Leavitt, R-UT, that would maintain a simplified sales-tax system. While both sides of the tax issue have been waging a war of words through press conferences, administration officials have remained mum.
     While the Clinton Administration has come out in support of the three-year moratorium, officials have declined to say whether they support making it permanent, an issue that has cropped up in the Republican presidential primary debates.
     Commerce Department General Counsel Andrew Pincus, who is one of the federal representatives on the commission, said he and his colleagues are waiting to hear more proposals for how to tackle the issue before announcing a formal position.
     "We asked people to develop proposals, and we want to see what they come up with," Pincus said in an interview. "In assessing the proposals, one thing that's of critical importance is fairness. That includes fairness for people who pay the taxes and fairness among different types of retailers."
     The other federal representatives, Robert Novick, general counsel for the United States Trade Representative, and Joseph Guttentag, Treasury Department senior adviser in the Office of Tax Policy, were unavailable for comment. A spokesman for Guttentag said the adviser needed permission from department higher-ups before speaking on the issue.

When The Music Stops
     James Lucier, a Prudential Securities analyst who has been observing the commission, said the administration officials have "played their cards advisedly" by holding back their opinions until the commission is closer to a final vote early next year.
     "It's like a great big cake walk, and they're all jockeying for position when the music stops," he said. "None of them wants to be in the hot seat when it's done."
     Ron Nehering, coordinator of the e-Freedom Coalition and director of national campaigns for Americans for Tax Reform (ATR), said presidential politics is playing a role in the administration's silence, pointing out that the tax commission's last meeting in March will occur after the presidential primaries.
     "In the end, the administration representatives will have to pick whether they're with the taxpayers or not with the taxpayers," he said. "Al Gore has been trying to play both sides of the fence. Any vote by the representatives would reflect on Gore."
     Commission member Stan Sokul, who is a consultant for the Association for Interactive Media, said the administration cannot afford to remain silent on Internet taxes for long, since it has become an issue among Republican presidential candidates.
     "Pretty soon the administration has to deal with the issue," Sokul said.
     Sokul added that he wouldn't be surprised if the three administration representatives abstain from voting on the commission's final report to avoid controversy.
     "Maybe they'll abstain because they'll say it's a state issue and a congressional commission," he said.
     Dave Anderson, deputy communications director for Vice President Al Gore's presidential campaign, said Gore has "not yet taken a position" on whether the Internet tax moratorium should be permanent. Calls to Gore's domestic policy office were not returned.

States Vs. High-tech Interests
     State and local groups supporting a simplified sales tax system for the Internet say the administration represents three wild-card votes on the panel. The commission must approve any final recommendation by a two-thirds vote.
     "From the state and local view, we pretty much count those three votes as open votes," said Neal Osten, director of the Commerce and Communications Committee of the National Conference of State Legislators. "I feel that they are probably more on our side, or at least favorable toward fixing the problem so we don't lose revenue."
     But that's where the administration has been ambiguous so far. White House officials want to maintain support from state and local leaders concerned about an Internet-driven revenue drain, but they have also heavily courted high-tech interests.
     On Nov. 29, Gore announced a new initiative to help expand electronic commerce by reexamining federal laws and regulations that may inhibit the Internet's growth.
     "In order to meet the full potential of this new medium, we must look ahead and clear away the 20th century barriers that may inhibit 21st century commerce," he said in a statement.
     Gilmore and other vocal members of the panel argue that sales taxes on the Internet could slow the growth of e-commerce, while state and local leaders fear an electronic tax-free zone would drain revenue from local coffers.
     "This is something the administration has never wanted to deal with directly, especially when it has to choose sides—high tech versus school teachers," Prudential's Lucier said.

- by Rebecca S. Weiner