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. Last Updated: 07/27/2016

No New Taxes on Net Trade, Says U.S.

WASHINGTON -- After a two-year study into the growing world of Internet commerce, the Clinton administration has decided not to call for new taxes or regulations on business conducted over the global network and instead will largely allow the private sector to determine how it will operate in cyberspace.


The U.S. administration's stance, detailed in a report scheduled to be released by President Bill Clinton on Tuesday, is a marked departure from the federal government's practice of closely regulating other electronic networks, such as telephones, television and radio.


Administration officials and technology industry leaders contend that new laws and taxes could stymie development of electronic commerce, which, if left loosely regulated, is expected to reach $200 billion in the United States by 2000, according to industry analysts.


"Commerce on the Internet could total tens of billions of dollars by the turn of the century," said the report's final draft. "For this potential to be realized fully, governments must adopt a non-regulatory, market-oriented approach."


Industry leaders commended the administration's approach, saying businesses need the incentive of regulatory freedom to embrace electronic commerce, a step many corporations recently have been taking with trepidation. Consumers, too, have been cautious about making purchases online.


The report also highlights a stark shift in the administration's policy toward adult material on the Internet following last week's Supreme Court decision striking down as unconstitutional a federal law that would have criminalized transmission of "indecent" material to minors over computer networks.


The report, in many ways, is intended to set an international agenda for the Internet. It advocates that other governments adopt a similar approach in an effort to make electronic transactions across national borders as seamless as those now occuring between states. The administration is expected to petition the World Trade Organization this summer to classify the Internet a tariff-free zone for the sale of electronic goods and services, such as software purchased online.