To make room
for Delna Jones, the advisory commission booted Netscape
CEO Jim Barksdale, who pocketed nearly $200 million when
AOL bought Netscape in 1999.
Jones' salary
on the Washington County Commission is $20,132.76.
In her last legislative
session (1993), Jones was the top-rated House member in
WW's biennial ranking of metro-area legislators.
Not many people start new careers in their late 50s, but
last year Delna Jones, a Washington County commissioner
and former state legislator, was thrust into the middle
of one of the biggest and most significant battles of the
Internet era--how and whether to tax e-commerce.
In 1999, Congress formed the 19-member Advisory Commission
on Electronic Commerce to make recommendations about Internet
tax policy. The problem was the panel was stacked with Internet
business execs. So the National Association of Counties
raised a stink and demanded that a local elected official
from a state without sales tax be appointed. Faster than
you can click a mouse, the 59-year-old Jones went from trying
to mollify Beaverton gas-station owners looking for a zoning
variance to battling with the CEOs of AOL and AT&T seeking
multibillion-dollar tax breaks.
The commission finished its work in April. In order for
its recommendation to be binding, 13 of the 19 members needed
to agree on policy, but Jones and Washington Gov. Gary Locke
joined a dissident minority in successfully opposing measures
they feared would weaken local governments. WW caught
up with Jones back on her home turf.
Willamette Week: Your colleagues on the commission
were mostly high-profile politicians and business leaders.
Were you intimidated?
Delna Jones: Not really. At the first meeting, I realized
that many of the CEOs had very little knowledge about the
tax structure and about the issues that we would be dealing
with.
You tackled a pretty complicated issue. Let's start
from the beginning. How is Internet commerce currently taxed?
Today, if someone in Portland buys something over the Internet--anything
at this point: a book, a sweater--sales tax is not collected
because Oregon is a non-sales-tax state.
What if the buyer lives in Boise, where there is a sales
tax?
If the seller does not have any physical presence in Idaho,
they are not required to collect a sales tax.
If a company did have physical presence they would be
required to collect a sales tax.
Yes.
What did the commission recommend?
Under the proposal submitted by 10 members, which I did
not support, if that same transaction were to take place
no one, really, would have to collect sales tax because
the loopholes were so broad that any company could get around
having to collect sales tax.
Why's that?
The commission said that if something can be delivered
electronically, then it is not taxed. That's books, CDs,
newspapers, magazines. If those same products were physically
purchased in a local store, they would also not be subject
to sales tax, even though they are today.
Is that practical?
No.
Two weeks ago, Congress voted to extend the moratorium
on collecting sales tax on all goods ordered over the Internet.
Your thoughts?
To me, it's a red herring. The idea that this is such a
fragile industry that it has to be subsidized...I think
that's foolish.
Where did the commission come down on that specific
issue?
It was an 8 to 10 vote supporting the proposal that would
not require the tax. Part of the recommendation stemmed
from the fact that local governments have relied on businesses
to do our work in collecting sales taxes, and that's not
a fair thing to continue to do. But by the same token, why
should how I order something make a difference as to whether
it's taxable? If I use my computer, it's not taxable; if
I call the local store and order it, it is. I cannot justify
subsidizing one form of transaction.
One of the things that was brought to light was there is
nothing to prevent a shopping center or a major department
store from putting Internet kiosks in their location where
customers can place orders and then walk down the aisle
to pick them up.
For states that have sales taxes, how real is the threat
to local revenue?
One of the arguments was that local and state governments
aren't having any problem with revenue, and that is true
today. But interest rates are going up; I don't know what
kind of an impact that's going to have.
Thirty-six governors wrote letters to Congress saying
the commission was too heavily weighted toward e-commerce
business interests. How would you respond?
It's a valid criticism. First of all, there was not a single
local retailer on the commission. No one who actually is
doing business on Main Street or in a shopping center was
represented.
Is Oregon a winner or loser under the moratorium on
new taxes?
If the moratorium is only on collecting sales tax on Internet
products, Oregon really won't be affected very much.
Why wouldn't an e-commerce company, such as 800.com,
just establish itself in Bermuda, which would allow it to
be free of all these tax questions?
I'm not sure that many of them would want to be in Bermuda.
Not that they wouldn't love the weather. They also rely
on a lot of infrastructure--like delivery and warehouses
that would be here.
Did you get lobbied by Oregon or regional business interests
and politicians during your time on the commission?
A lot of it came right at the very end. I came to work
one day and found out that members of Citizens for a Tax-Free
Economy had practically shut down my county e-mail. They
started flooding me with duplicate messages. I got bombarded
by people who didn't have a clue what they were talking
about.
Is there one thing that really sticks out in your mind
that you learned from this?
When people of good will can sit down together and put
their personal agendas aside, and when you have a chair
who's willing to allow them to work, you can get to a reasonable
position. But when those things are not there, when personal
agendas and personal profit is more important than good
policy, then I think it's impossible.
And you ended up at the latter point?
Yes. The thing that's sad is that we were so close. If
we'd had 24 more hours, we could have come away with a good
agreement. Instead, what we agreed on wasn't good tax policy.
What surprised you most about the process?
I'm hesitant to say this, but I think the chair put his
own agenda ahead of the desire to have a compromise that
would have had the super-majority that is required in the
statute.
That chair was Gov. Jim Gilmore of Virginia?
Right.
Can you tell me why he would have been putting his personal
agenda ahead of the commission?
He probably had pressures and maybe believed that his agenda
was the right agenda.
Isn't AOL headquartered in Virginia?
Yes.
Is that what was driving his agenda?
I don't think so. I think it was congressional activity.
You served 12 years in the Legislature. How did working
on the national level compare?
Apples and oranges. In a legislative arena, especially
in Oregon, you have such close contact with your constituency.
In D.C., the folks there have lost touch with the real folks.
And it's easier to make decisions affecting them without
realizing it.
Do you shop on the Internet yourself?
Some. Not a lot, but some.
What do you buy?
Flowers, Christmas presents.
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Willamette Week | originally
published May 10,
2000
|
