Broadly speaking, Internet transactions include sales conducted over the Internet (think about the last time you bought a book over the Internet or your company bought 100 computers over the Internet), sales of Internet access (that bill that shows up every month), and sales of services used in connection with Internet access (e.g., Web page design and hosting).
So, what happened this year? Lots of discussion of the issues, lots of suggestions, but no final answers. The Advisory Commission on Electronic Commerce (ACEC), established pursuant to the 1998 Federal Internet Tax Freedom Act, held several contentious meetings, including one in Dallas earlier this year. However, on most of the key issues, the ACEC was unable to reach the two-thirds majority required by Congress for formal recommendations. Nonetheless, a simple majority of the ACEC made specific tax suggestions to Congress, including a proposal to prohibit tax on sales of digitized goods and products, and on their
