Why does the 300,000-member National Taxpayers Union (NTU) oppose Internet taxation?

In support of Massachusetts' Governor Paul Cellucci's statement opposing Internet taxation before the U.S. Senate Budget Committee, NTU noted

Internet businesses and 'servers' can be located anywhere, and can respond to taxation by moving out of the U.S. Attempts to tax Internet services or to put up 'tax gates' on millions of Web sites under thousands of government jurisdictions would lead to administration nightmares beyond those created even by Value Added Taxes.

A study last year by the National Bureau of Economic Research concluded that applying existing sales taxes to the Internet would slash the number of online buyers by 25 percent and plummet purchases by 30 percent or more—thereby damaging one of the leading sectors in America's booming economy. Even the Federal Communications Commission agrees with this sentiment, recommending a 'hands-off' approach in a recent report.21