"Read my lips - no e-taxes"

NEWS The US Senate has voted narrowly to approve a two-year extension to the moratorium on web taxation, which has just expired. By a margin of 53 to 47 the Senate voted down an amendment to the bill which would have allowed individual states to levy new web taxes once they'd simplified their tax system. However, the vote still leaves the US unsure of where to turn when this new moratorium runs out in 2003. Three years ago, when the issue was first postponed, US regulators promised they would have developed a policy by the time the moratorium expired. The expiry date for this was 21 October, but this new bill has been rushed through before states start trying to levy new taxes. But despite this quick action it leaves the US no closer to finding a long-term solution to the problem. The issue is important to US e-tailers who are already struggling against a downturn in the US economy and continuing negative investor sentiment. Lobbyists for ecommerce companies say putting extra taxes on goods bought over the web would be a disaster for the sector. At the same time tax collectors in the US are concerned that they are missing out on significant revenue as more and more people start to buy online. A recent study by the University of Tennesse found that the US could be missing as much as $45bn of tax every year by 2006. But Gene Alvarez, senior programme director for analyst house Meta Group said the decision was the right one for the time being: "If it became apparent to consumers that they suddenly had to pay more tax to buy on the web, it would be a devastating blow." Alvarez said he thought the government's sluggishness to tackle the issue was down to the fact that ecommerce sales hadn't taken off to the extent predicted: "There just isn't enough revenue there for them to get up and run after," he said.