Mr Armey said on Wednesday that he would look for three to five year extension to a ban on internet sales taxes. The current ban is due to expire in October. However, Mr Armey said he would not be seeking a permanent ban.
An extension to the moratorium would block the attempt by individual states to legislate for a change in the position on taxing e-commerce. Currently, a 1992 US Supreme Court decision prevents states from collecting any form of sales tax unless the retailer has a physical presence in that state. The states are worried that, with the continued growth of e-tail, their tax revenue will drop significantly without some provision for taxing on-line retailers.
Talks between groups of senators over the proposed bill stalled this week after business groups objected to the lack of rules to compel states to simplify their tax regulations, claiming current regulations are an unfair burden on e-commerce.
As the draft currently stands, Congress would allow internet sales taxes if at least 25 states approve a tax simplification plan developed by the National Governors Association. The plan does not set specific tax levels but seeks to simplify the thousands of sales and uses taxes through a set of standardised definitions of goods.