Bush's signature extends tax moratorium on Internet access fees for another two years

Thursday, November 29th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) _ Shoppers who surf the Web can count on continued tax-free Internet access now that President Bush has signed into law a two-year extension of the ban on Internet-related taxes.

Bush, who had wanted Congress to send him a longer tax moratorium, signed the legislation Wednesday to ``ensure that the growth of the Internet is not slowed by additional taxation,'' he said.

Online spending is estimated to account for 15 percent of holiday buying this season, Bush said. The bill will ``keep access to e-commerce services affordable.''

With his signature, Bush renewed the Internet-fee tax ban enacted three years ago, which expired Oct. 21.

``The Internet is an innovative force that enables such applications as distance learning, video conferencing and precision farming. Government must do its part to make access to these services affordable. It should not raise costs through additional taxation,'' the president said in a written statement.

The House and Senate, in negotiating the final legislation, put off for another day the stickier question of whether state and local governments should be allowed to begin a process of collecting sales taxes for online purchases.

Uncollected state sales taxes on electronic commerce in 2000 were estimated at close to $26 billion.

Most traditional retailers, including many of the nation's largest chains, also wanted online purchases to be subject to sales taxes because they said the current situation _ where the vast majority of items bought from Web sites are tax-free _ gives Internet competitors an unfair advantage.

Bush also signed into law Wednesday:

_A $41.6 billion bill to finance the Commerce, Justice and State departments. The measure is almost $2 billion more than last year's total and $800 million above Bush's request. It includes hundreds of home-district projects worth many millions of dollars for local police agencies to buy new equipment and for oceanic and meteorological research by schools and local agencies. Bush objected to a provision setting requirements for how the Justice Department organizes its anti-terrorism activities, which he said is ``impinging upon my authority as president to direct the actions of the executive branch.'' He added, ``I therefore will construe the provision to avoid constitutional difficulties and preserve the separation of powers.''

_A $75.9 billion spending bill for the Agriculture Department and Food and Drug Administration. It halved proposed aid for apple growers to increase money for the Women, Infants and Children nutrition program, which provides food aid to low-income women who are pregnant or have young children. The legislation's overall spending level is $1.6 billion above what the president wanted.

_A bill authorizing the Federal Power Marketing Administration to establish property protection programs and offer rewards for information leading to arrests and prosecution for damaging administration property.

_Legislation to restore 29 statutory reporting requirements that expired last year. Bush said, however, that information in some reports duplicates that in others and suggested that continuing to compile them for congressional oversight might ``impose an excessive burden'' on federal agencies.

Also on Wednesday, Bush issued an executive order formally creating the President's Council on Bioethics, which Bush promised in August to form. The panel, to be headed by University of Chicago bioethicist Leon Kass, primarily will monitor research on human embryonic stem cells and recommend guidelines and regulations.

According to Bush's order, the panel may also weigh in on cloning, euthanasia and ``assisted reproduction'' such as in-vitro fertilization, about which Kass has had reservations. He said Wednesday he supports the procedure only as a treatment for infertility in married couples.

Other ethicists, scientists, doctors, lawyers and theologians will be named to the council in the next several weeks, White House spokesman Scott McClellan said.