Survey Shows Majority of CFOs Favor Extension of Internet Tax Freedom Act

MENLO PARK, CA -- If businesses had their way, the majority would continue offering tax-free shopping online, suggests a recent survey of chief financial officers (CFOs). More than half (57 percent) of respondents said they favor an extension of the three-year moratorium on Internet access taxes and multiple or discriminatory taxes on e-commerce. The moratorium, established in 1998 by the Internet Tax Freedom Act, expires in October 2001.

The survey was developed by RHI Management Resources, North America's largest consulting services firm providing senior-level accounting and finance professionals on a project basis. It was conducted by an independent research firm and includes responses from 1,400 CFOs from a stratified random sample of companies with more than 20 employees.

CFOs were asked, "Do you think the three-year moratorium resulting from the 1998 Internet Tax Freedom Act should be extended?" Their responses:

Yes 57%
No 16%
Don't know/no answer      27%

The Internet Tax Freedom Act bars state and local governments from imposing taxes on Internet access. It is also meant to protect online buyers and sellers from situations in which multiple state or discriminatory taxes are levied on e-commerce transactions.

The moratorium is of interest to financial executives who are not only assessing the ultimate costs of products and services offered online to customers, but also the technological impact on their firms.

"If new Internet tariffs are eventually imposed, companies will need to ensure their web sites and financial systems can handle increasingly complex tax calculations for online business transactions," said Paul McDonald, executive director of RHI Management Resources.

Additional information about the Internet Tax Freedom Act can be found at

RHI Management Resources has locations in major cities throughout the United States, Canada, Europe and Australia, and offers online job search services at


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