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Letter to Senator Byron Dorgan with regards to S. 2775
September 18, 2000 The Honorable Byron Dorgan Dear Senator Dorgan:
We once again want to express our appreciation to you and Senators Voinovich, Enzi and Graham for your efforts to draft legislation that you believe would assist state and local governments in the collection of sales and use taxes on remote sales. Unfortunately, we also must express our deepening concern that the changes to your legislation, S. 2775, the Internet Simplification and Equity Act, that are being proposed as a "compromise" with Senator McCain will only serve to complicate our efforts to streamline our states sales and use tax systems. As you are aware from our previous communications, it is our strong belief that states should have the opportunity to simplify state and local sales tax systems before bringing a request to Congress for authorization to require remote sellers to collect the states' sales and use taxes. As of today, 27 states have become official participants in the Streamlined Sales Tax Project (SSTP), either through legislative enactment or executive order. As you are aware the SSTP is preparing to make recommendations for the first phase of simplifications, which will be before our legislative chambers in 2001. We believe that state legislatures should be given the opportunity to craft a proposal without a congressional mandate as to what the simplified system must include. Although we respect your efforts to solve the remote sales tax problem, our objections to S. 2775 are unchanged. We are still opposed to an extension of the current moratorium, which does not expire until October 21, 2001; to a mandated one-rate per state for all remote commerce; to requiring the National Conference of Commissioners of Uniform State Laws to oversee state simplification efforts; and, to a congressionally established national de minimis threshold for retail sales. With regard to a possible "compromise," we are concerned that you appear willing to agree to Senator McCain's demand that there be a future affirmative vote of Congress rather than a negative vote. This, we believe would remove any incentive a state would have to undertake the political battle a mandate of one rate per state for remote commerce would entail. We are also concerned about additional amendments that apparently are being discussed. These include one which would halt current state enforcement action against vendors in which there is a question of nexus and the vendors' failure to collect sales and use taxes. This and other rumored amendments would only make the legislation worse. Although we share with you the critical objective of developing a mechanism that will allow states to collect sales and use taxes on remote sales, we find that we still disagree with the approach taken by S. 2775. We regret to inform you that we must publicly oppose this legislation in the remaining weeks of the 106th Congress. Sincerely,
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