John Engler on Technology Former Republican MI Governor

Establish “Cybercourt” to resolve disputes on-line & quickly

For inventors, entrepreneurs, small tech and IT firms, the protection of intellectual property rights is a critical concern. We need a connected court that can keep up. I propose that Michigan boldly go where no state has gone before by creating the Cybercourt. In the Next Michigan, the Cybercourt will:
• feature e-filings, web-based conferencing and virtual courtrooms;
• significantly reduce travel time and cost;
• recognize that prompt dispute resolution means the difference between success and failure for a new venture; and,
• use mediators and judges who have the skills and knowledge to render prompt, competent decisions.

Level playing field for Main Street vs. Internet sales tax.

The nation’s governors have a strong and unified message to Congress: deal fairly with Main Street retailers, consumers, and local governments. In a letter sent to all members of Congress late Friday, 44 governors said:

If you care about a level playing field for Main Street retail businesses and local control of states, local governments, and schools, extend the moratorium on taxing Internet access ONLY with authorization for the states to streamline and simplify the existing sales tax system. To do otherwise perpetuates a fundamental inequity and ignores a growing problem.

Currently, sales and use taxes are owed on all online transactions, but states are prohibited from requiring “remote sellers” to collect and remit those levies. A 1992 US Supreme Court decision said states can only require sellers that have a physical presence in the same state as the consumer to collect so-called use taxes. In instances when a seller does not have a physical presence, consumers are required to calculate and remit the taxes owed to their home states at the end of the year. The problem is most people are unaware that they’re supposed to pay, and states lack an effective enforcement mechanism. Online and catalog sellers, thereby, have a significant price advantage over Main Street businesses that must collect a sales tax on all transactions.

The loophole creates serious budget problems for schools, states, and local governments. A study estimated that states could lose as much as $14 billion by 2004 if they are unable to collect existing taxes on Web-based sales. Nearly half of state revenues come from sales taxes.