BY SARAH ROSS

PORTLAND- In a statement to the press on Thursday, U.S. Senator Ron Wyden, D-Oregon, said forcing Internet retailers to become tax collectors “amounts to bureaucratic water torture.”

Wyden, a longtime advocate of tax-free internet, was the author of the Internet Tax Freedom Act passed in 1998 which keeps Internet businesses from using sales and other taxes issued by states and other jurisdictions.

Wyden met Tuesday with a number of Internet-based businesses in Medford, a city which he calls an “epicenter” of e-commerce.

The senator, currently up for re-election, spoke with the businesses about the challenges they are facing and potential solutions.

“Instead of seeing their money go out the door in sales taxes on the items they ship, they have been able to invest in their own business, expand, hire more people and be more innovative,” said Wyden in the statement. “I intend to continue to thwart any efforts that would limit the development of the Internet and discourage its use as a platform of commerce.”

State Employment Economist Nick Beleiciks said that there were 384 Internet-based retail and shopping businesses in Oregon in the first quarter of 2010. This number, he said, is a “very small portion” of Oregon’s overall business environment, which totaled 125,134 businesses, excluding self-employed people.

Steve Buckstein, Founder and Senior Policy Analyst at Cascade Policy Institute, parent organization of The Oregon Politico, said he is glad to see that Wyden recognizes taxing E-Commerce is bad for the economy but that he wishes Wyden understood most businesses “already are burdened with having to collect taxes from their customers.”

“They don’t pay taxes so much as they simply collect taxes from customers, employees or shareholders and pass them on to the government,” said Buckstein. “All taxes are ultimately paid by individuals, not just Internet sales taxes.”

Craig Johnson, CEO of Musician’s Friend, served as host for the meeting between Wyden and Medford’s E-Commerce businesses but could not be reached for comment. But in Thursday’s press release, he called the meeting “productive.”