Governor Gray Davis also signed a bill extending a moratorium on
internet access taxes for three years, although doing so was
largely symbolic since the moratorium was contingent upon the bill
on sales tax becoming law.
The debate over on-line taxes is split between those that say
e-commerce needs government support and those that say the support
will be at the expense of small traditional businesses.
Davis said:
“In order for the internet to reach its full
potential as a marketing medium and job creator it must be given
time to mature… At present, it is less than 10 years old. Imposing
sales taxes on internet transactions at this point in its young
life would send the wrong signal about California’s international
role as the incubator of the dot.com community.”
