CIOs critique Congress on a national plan for Internet sales taxes and raising H-1B visa limits

Congress in 2004 is set to address the problems of Internet sales taxes and whether to increase the number of visas for foreign high-tech workers. We asked CIOs and e-commerce executives to weigh in on the wisdom of the lawmakers’ efforts.


Issue: Fair Internet taxes for all

2004 agenda: Create a national agreement for collection of state sales taxes from online and catalog retailers

The rub: Currently, states can’t force retailers with no in-state stores to collect sales taxes, and state and local government lost more than $13 billion in 2001 because of it, according to a study by the University of Tennessee. Pending legislation in Congress, sponsored by Rep. Ernest Istook Jr. (R-Okla.) and Sen. Michael Enzi (R-Wyo.), would allow states to require remote sellers to collect taxes by joining a national agreement. Companies with annual out-of-state sales of less than $5 million would be exempt.

E-commerce execs say: It’s fair. Every retailer should pay the same taxes, says Sam Taylor, vice president of e-commerce with Lands’ End, whether or not they have a physical presence in a state. Before it was acquired by Sears in 2002, Lands’ End collected sales taxes in only five states but now collects taxes on catalog and Internet sales in all 50. "The role of government is to level the playing field, creating rules and laws that balance fair trade with bureaucracy," says Mark Kohls, former director of e-commerce technology with furniture retailer KI Inc., which does not collect sales taxes in 27 states.


Issue: Who gets tech jobs

2004 agenda: Raise the limit on the number of foreign high-tech workers allowed in the United States on H-1B visas

The rub: On Oct. 1, the cap on H-1B visas dropped from 195,000 to 65,000. With bills pending that would further limit H-1Bs, lawmakers are being pressured on one side from companies such as Intel, which says it continues to have trouble hiring U.S. workers for some high-skill tech jobs, and on the other by workers who point out that unemployment for some technology jobs is at an all-time high.

CIOs say: Depends who you ask, even among tech company CIOs who, as a group, clamor for foreign labor. "There are plenty of people in the United States willing to perform these jobs," says Walt Crosby, executive vice president and CIO at Terabase, a search engine and database software vendor. Crosby thinks his peers are misusing the visas by importing foreign workers as cheap labor, instead of hiring foreign workers only for hard-to-fill positions.