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Executive Committee Task Force on State and Local Taxation of Telecommunications and Electronic CommerceNCSL Endorses Overhaul of Sales Tax SystemUpdated 6 January 2000 A Task Force of the National Conference of State Legislatures approved NCSL's endorsement of a radically simplified sales tax system to reduce administrative burdens on merchants. This voluntary system would allow merchants in other states to collect sales and use taxes without any new administrative burdens. The proposal, developed jointly by the National Governors' Association and the National Conference of State Legislatures and endorsed by major local government organizations, would create a system where a third party vendor would be responsible for determining whether items are taxable and what rate of tax would apply. The third party would collect and remit taxes to states, completely removing sellers from any collection or administrative responsibility. The system would be made available to merchants on a voluntary basis. Under existing US Supreme Court precedent, states may not force remote sellers to collect taxes from customers. Many sellers have said for years that they would be willing to collect the tax if the costly administrative burden was removed. The NCSL Task Force, chaired by Representative Matt Kisber of Tennessee and Senator Steve Rauschenberger of Illinois, unanimously endorsed the proposal on behalf of NCSL at its Chicago meeting in November. The Task Force was created in early-1999 to ensure that states have a strong voice in the ongoing national debate over the future of state and local taxes on internet-related commerce. It will meet in January in Tampa, Florida to discuss telecommunications tax reform proposals and to develop implementing legislation for states interested in participating in the new sales tax system. © 2000, National Conference of State Legislatures |
