Internet Tax Fight Settled, Local Gov Reps Drop Suit

The National Association of Counties and the U.S. Conference of Mayors announced yesterday that they will drop litigation pending against a new congressional advisory group that will set the pace for government taxation of the Internet.

NACo and USCM in early March filed a suit to block the group from holding its first meeting, which is now scheduled for late June. To settle the matter and make way for a smooth gathering, U.S. Sen. Trent Lott (R-Miss.) replaced Netscape chief executive officer James Barksdale's appointment with a local government representative: Washington County, Ore., Commissioner Delna Jones.

The litigation had stemmed from the associations' long-standing notion that the advisory panel was too heavy with industry representation, which the associations believed could hurt governments' interests in issues related to taxing Internet business. The panel was put in place by last year's Internet Tax Freedom Act, which imposed a three-year moratorium on new electronic commerce taxation.

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