Resolution One
Host State Appreciation
WHEREAS, this Seventy-Third Annual Meeting of the Federation of Tax Administrators, held in San Antonio, Texas, was a professionally stimulating and educational conference, and
WHEREAS, the success of the conference depends heavily on the guidance and participation of the Host Committee, and
WHEREAS, the greatest care and attention was paid to the delegates and guests of the Seventy-Third Annual Meeting, and
WHEREAS, the Annual Meeting ran with great efficiency and order, and
WHEREAS, the Annual Meeting provided a rewarding and enjoyable time for all, and
WHEREAS, none of this would have been possible without the leadership and help of Comptroller Carole Keeton Strayhorn, Deputy Comptroller Billy Hamilton and the Host Committee consisting of Debbi Bailey, Eddie Coats, Winfred Kang, Eleanor Kim, Dwain Osborne, Drew Scherz, Karen Snyder, Janet Spies, and Kaye Tucker, now, therefore, be it
Resolved, that the delegates and guests in attendance at this Seventy-Third Annual Meeting extend their sincere thanks and appreciation to the commissioners and all the members of the Host Committee for the time they devoted to furthering the common professional goals of all tax administrators.
Resolution Two
FTA President and Board Appreciation
WHEREAS, President Mary Jane Egr Edson has dedicated attention to the affairs of the Federation of Tax Administrators during her tenure in office, and
WHEREAS, President Egr Edson has given freely of her time and energy, and
WHEREAS, the efforts of President Egr Edson have made a notable contribution to the work and operations of FTA, and
WHEREAS, President Egr Edson has facilitated the conduct of the business of the Seventy-Third Annual Meeting of the Federation of Tax Administrators by her skill and courtesy as presiding officer of the general conference, now, therefore, be it
Resolved, that the members of the Federation at this Seventy-Third Annual Meeting express their personal appreciation and sincere thanks to President Egr Edson on this occasion.
Resolution Three
Janie Bowen
Leadership Award Winner
WHEREAS, the Federation of Tax Administrators has established the FTA Award for Leadership and Service in State Tax Administration, and
WHEREAS, the award is presented annually to an individual who has demonstrated sustained and significant service in the practice and administration of state taxes, and
WHEREAS, the award recognizes and encourages outstanding achievements that advance the field of state taxation and improve the standards and techniques of state tax administration, and
WHEREAS, Janie Bowen was selected the winner of the 2005 Award for Leadership and Service in State Tax Administration, and
WHEREAS, Janie serves as Executive Commissioner of the Office of Policy and Administration in the Virginia Department of Taxation, and
WHEREAS, Janie serves as the lead spokesperson for the Department of Taxation before the Virginia General Assembly, and
WHEREAS, Janie has managed or held executive oversight for virtually every function in the agency, and
WHEREAS, Janie is also an member in the Southeastern Association of Tax Administrators (SEATA), serving on its executive committee and as a member of a special committee that drafted and implemented SEATA's first information exchange program, and
WHEREAS, Janie has also been highly involved in the deliberations of the Streamlined Sales Tax Project, now, therefore, be it
Resolved, that the Federation of Tax Administrators congratulates Janie Bowen on her outstanding achievements and recognizes her as the recipient of the 2005 Award for Leadership and Service in State Tax Administration.
Resolution Four
Pennsylvania Department of Revenue
Recipient of the FTA Award for Research
WHEREAS, the Pennsylvania Department of Revenue was awarded the 2005 FTA Award for Outstanding Management and Organizational Initiative, and
WHEREAS, the award is made to a state tax agency that has undertaken research and analysis to assist in state tax administration, and
WHEREAS, the agency has committed itself to strong work in analyzing the effects of combined reporting on state tax revenues, and
WHEREAS, the analysis was done to support the Pennsylvania Business Tax Reform Commission, which examined business taxation and sought ways to improve business climate and fairness, and
WHEREAS, as a result of the Department's analysis, the Commission recommended that the state adopt mandatory unitary combined reporting as a means of broadening the corporate tax base and lowering the tax rate, now, therefore, be it
Resolved, that the Federation of Tax Administrators congratulates the Pennsylvania Department of Revenue on winning the 2005 FTA Award for Outstanding Research and Analysis.
Resolution Five
Louisiana Department of Revenue
Recipient of the FTA Award for Technology Applications
WHEREAS, the Louisiana Department of Revenue was awarded the 2005 FTA Award for Technology Applications, and
WHEREAS, the award is made to a state revenue department in recognition of the creative design, development, and implementation of effective applications of automated information processing technologies to tax administration, and
WHEREAS, the Louisiana Department DELTA Project was a multi-year effort to modernize and integrate revenue operations, affecting 20 tax programs, and
WHEREAS, it established an enterprise-wide architecture allowing the Department of Revenue to operate more efficiently, improve service and increase revenues, and
WHEREAS, the program was cited by the judges for its innovation and creativity, now, therefore, be it
Resolved, that the Federation of Tax Administrators congratulates the Louisiana Department of Revenue on winning the 2005 FTA Award for Technology Applications.
Resolution Six
Honoring Former Board Members
WHEREAS, FTA Board of Trustees members Rick Clayburgh, Elliot Hibbs, Will Rice and Ken Miller recently left the field of state tax administration, and
WHEREAS, these men, through dedicated service and abilities, had important roles in the growth and development of the Federation of Tax Administrators as well as the state tax administration profession generally, now, therefore, be it
Resolved, that FTA expresses its sincere appreciation to these valued colleagues for their contributions to state tax administration.
Resolution Seven
WHEREAS, the states and the IRS have embarked on certain projects to enable the joint e-filing of return data of various types, including 1120 and 1065, and
WHEREAS, coordination of this project has been undertaken by the FTA-IRS Tactical Advisory Group (TAG), which creates Fed-State Deployment Teams for this purpose to advise on business requirements, and
WHEREAS, TAG also coordinates with the FTA-sponsored TIGERS technical group on creation of technical Fed-State data structures, and
WHEREAS, significant and rapid progress has been made by all groups on these projects, now, therefore, be it
Resolved, that state tax administrators thank the IRS for its close coordination with the states and FTA in developing these Fed-State E-File projects, and be it further
Resolved, that state tax administrators are encouraged upon request to actively participate in and support the efforts of the TAG, the Fed-State Deployment Teams, and TIGERS in promoting such important joint state and IRS initiatives.
Resolution Eight
Task Force on EDI Audit and Legal Issues for Tax Administration
WHEREAS, the Task Force on EDI Audit and Legal Issues for Tax Administration was established to identify and examine the effect of EDI and related business processes on the tax administration process, and
WHEREAS, the Task Force is composed of representatives of the Council On State Taxation, Institute of Professionals in Taxation, Tax Executives Institute, Multistate Tax Commission, Federation of Tax Administrators and commissioners from several state tax administration agencies, and
WHEREAS, the Task Force has developed, and the FTA Board of Trustees has approved, (1) a model recordkeeping regulation intended to govern taxpayer retention of books and records, particularly electronically generated and retained records, (2) a white paper examining the various issues related to auditing in an electronic environment, (3) a white paper describing the use tax documentation and verification issues involved with the use of corporate procurement cards, (4) a white paper identifying the tax and documentation issues associated with the use of evaluated receipts settlement processes, (5) a white paper examining Sales and Use Tax Compliance Agreements (SUTCAs), which specify an agreed-upon method for calculating and remitting tax on specified purchases and (6) a model direct payment regulation focusing on the business needs of a taxpayer in determining whether direct pay authority should be granted, (7) an educational document on sampling that is supplemented with a summary of state sampling practices, and (8) an educational document which focuses on tax administration issues specifically related to business-to-business e-Commerce, and
WHEREAS, the Task Force has issued its final report and is currently monitoring developments associated with audit procedures/certification standards and electronic exemption certificates, and
WHEREAS, the FTA Board of Trustees has approved the Model Recordkeeping and Retention Regulation as the basic framework for states to follow when addressing the issue of taxpayer retention of electronically generated and retained books and records, and
WHEREAS, the Sales and Use Tax Compliance Agreements (SUTCA) white paper examines agreements between taxing agencies and taxpayers, specifying an agreed-upon method for calculating and remitting tax on specified purchases, and identifying alternative reporting methodologies, best practices, and recommendations for taxpayers and tax authorities to follow when entering into these agreements and,
WHEREAS, each of these efforts is believed to represent an appropriate balance between the interests of tax administrators and taxpayers and will provide a measure of consistency and uniformity for taxpayers and promote effective tax administration, now, therefore, be it
Resolved, that the Federation of Tax Administrators congratulates the participating state and industry Task Force members who devote their time and efforts to examining the issues associated with these projects and to identifying approaches that meet the needs of taxpayers and tax administrators, and be it further
Resolved, that the Federation of Tax Administrators respectfully encourages its members to work with taxpayers in addressing these and other issues related to EDI business processes, and to share experiences and approaches with other states, and be it further
Resolved, that the Federation of Tax Administrators respectfully recommends that its members examine the model regulations and white papers and consider using them as models or starting points when developing their individual laws and policies.
Resolution Nine
Suspicious Filer Exchange of Information Program
WHEREAS, TaxNet Governmental Communications Corporation (TGCC) has been formed to provide network and communication services to state tax agencies to facilitate communication among them and to assist in accomplishment of their missions, and
WHEREAS, TGCC is organized to qualify as an instrumentality of the states within the meaning of Section 115 of the Internal Revenue Code of 1986 and as a public charity exclusively for charitable and educational purposes within the meaning of Sections 501(c)(3) and 509(a)(3) of the Code, and
WHEREAS, in 1996, TGCC made available the Suspicious Filer Exchange of Information Program that was designed to provide a secure, electronic method of exchanging suspicious or potentially fraudulent individual income tax information, and
WHEREAS, a decision was made to use PGP Enterprise Software with its public/private key technology to encrypt, sign, decrypt, and verify e-mail and attachments between participating states, and
WHEREAS, 23 states have signed a Memorandum of Understanding and have agreed to utilize PGP Enterprise Software to exchange Suspicious Filer information via the public Internet, and
WHEREAS, FTA recently developed a Suspicious Filer Project page within TaxExchange that provides background on the program and also streamlines the process by which participating states exchange public keys by allowing states to access a single site to retrieve this information, now, therefore, be it
Resolved, that state tax administrators be urged to evaluate and consider participating in the Suspicious Filer Exchange of Information Program.
Resolution Ten
Compendium of Exemplary Practices
WHEREAS, an important part of the mission of the Federation of Tax Administrators is to facilitate professional learning and knowledge among state tax agency employees, and
WHEREAS, FTA's members have proven themselves to be world leaders in the development of innovative, effective and efficient programs that enhance the profession of tax administration, and
WHEREAS, FTA has established a Compendium of Exemplary Practices, also known as "STEAL-IT," that offers states a forum to spotlight their most admirable programs, and
WHEREAS, the Compendium resides on TaxExchange as a research library where states can either search for existing examples of programs under consideration or simply browse in the search of good ideas, and
WHEREAS, this Compendium is a searchable document, and
WHEREAS, more than 170 programs already have been submitted by state tax agencies to be shared through the Compendium, now, therefore, be it
Resolved, that state tax agencies be thanked for their energetic participation in this program, and be it further
Resolved, that state tax agencies be encouraged to continue submitting programs to the Compendium, and be it further
Resolved, that agencies be urged to review the programs currently listed and to use the Compendium as a resource when considering new enhancements in tax administration.
Use of Standards for 2-D Barcoding
WHEREAS, the use of two-dimensional barcoding and scanning to automate the capture of tax return data has emerged as a useful alternative filing method, and
WHEREAS, to successfully implement this technology in return processing, states are required to work in partnership with tax software companies because they must incorporate 2-D output capability within the products they provide to taxpayers and practitioners, and
WHEREAS, state revenue agencies and software developers have a mutual interest in ensuring that 2-D technology is implemented in as consistent a manner across states as possible, and
WHEREAS, since 1999 the Federation of Tax Administrators, its member states, and the National Association of Computerized Tax Processors have worked together in public forums to create and maintain important standards guidance on the implementation of 2-D barcode processing capability, and
WHEREAS, this guidance has now been published on the FTA and NACTP Web sites, and through a process of continual revision is made useful to marketplace participants, now, therefore, be it
Resolved, that state tax administrators are encouraged to review, employ and promote the use of consensually developed 2-D barcoding standards and guidance in their implementation of this technology, and be it further
Resolved, that state tax administrators are encouraged to actively participate in the continuing development and maintenance of 2-D barcoding standards as their states move forward with the use of 2-D barcoding.
Use of Standards for eXtensible Markup Language (XML)
WHEREAS, eXtensible Markup Language (XML) is a new way to mark and exchange data transferred over the Internet that enables more widespread use of electronic commerce, and
WHEREAS, the use of XML has the potential to assist the tax agencies in extending the reach and richness of their electronic commerce tax programs, and
WHEREAS, state revenue agencies, software developers, and others have a mutual interest in ensuring that XML for tax administration is implemented in as consistent a manner across states as possible, and
WHEREAS, a defined and widely accepted specification for XML has emerged from a World-Wide Web Consortium (W3C), and
WHEREAS, various and distinct user-entities employing this specification have an opportunity to agree on common standards and data vocabularies for its use, and to work in partnership to successfully implement this technology, and
WHEREAS, the Federation of Tax Administrators and the states, through sponsorship of the Tax Information Group for EC Requirements Standardization (TIGERS), have worked together with IRS and others in public forums to develop, maintain and promote standards guidance on the implementation of XML for tax administration, and
WHEREAS, this guidance is available on the FTA Web site, now, therefore, be it
Resolved, that state tax administrators are encouraged to review, employ and promote the use of agreed-upon XML standards and guidance in their implementation of this technology, and be it further
Resolved, that state tax administrators are encouraged to actively participate in the continued development and maintenance of XML standards through participation in the TIGERS XML effort.
Fed-State E-File Models
WHEREAS, the FTA-IRS Tactical Advisory Group has developed a Fed/State e-File Model and is recommending its use by the IRS in its Modernized Fed-State E-File development efforts including employment tax, corporate tax, individual income tax, and others, and
WHEREAS, features of this e-model include:
WHEREAS, benefits of this approach include:
for IRS,
á Leverage of state participation to increase e-file volumes along with more straightforward "message marketing"
á Single Fed/State architecture reduction in cost of supporting Fed/State functionality across multiple programs
á Encouragement of practitioner participation by providing convenience features such as single point acknowledgement
for States,
á Leverage of IRS e-file participation to increase e-file volumes at state level
á Single Fed/State architecture reduction in cost of supporting multiple Fed/State e-file programs
á Architecture is extensible to state-only tax types such as Sales
á Use of IRS resources to provide single point filing/retrieval and single point acknowledgement reduces implementation costs to states
For Software Developers/Service Providers,
á Increase in customer base through ability to offer complete Fed/State products and services
á Single Fed/State architecture reduction in cost of supporting multiple tax types
á Single point filing/acknowledgement reduces complexity of software and transmissions,
now, therefore, be it
Resolved, that the Federation of Tax Administrators endorses and adopts the Fed/State e-File Model recommended by the FTA-IRS Tactical Advisory Group, and recommends that the IRS deploy this model across all major individual and business tax e-File programs as they are developed for the Modernized e-File platform.
Resolution Fourteen
Motor Fuel Administrative Enhancements
WHEREAS, the petroleum industry and state tax agencies desire to operate in the most effective and efficient manner, and
WHEREAS, the states employ different requirements for the reporting of motor fuel tax information as well as different definitions of various terms, and
WHEREAS, the Motor Fuel Tax Uniformity Committee of the FTA Motor Fuel Tax Section has created uniform guidelines, forms, reports, definitions, product codes, checklists, and schedules for the reporting of motor fuel tax information, now, therefore, be it
Resolved, that states be encouraged to consider the uniform guidelines, forms, reports, definitions, product codes, checklists, and schedules adopted by the FTA Motor Fuel Tax Section at its 2004 annual meeting.
Resolution Fifteen
Sales Tax Simplification
WHEREAS, forty-five states and the District of Columbia impose a sales and use tax, and
WHEREAS, there is a clear need for simplification of state and local sales tax administration and greater uniformity among states in the administration of the sales and use tax, and
WHEREAS, simplification of the sales and use tax will reduce any undue burden imposed on those now collecting the tax, and
WHEREAS, the Streamlined Sales Tax Project, through the efforts of more than 40 states and substantial segments of the business community, has developed a series of recommendations that when implemented will significantly simplify the sales tax administration system and reduce the compliance burden for all types of retailers, and
WHEREAS, the Implementing States of the Streamlined Sales Tax Project have reviewed, modified and incorporated the recommendations of the Streamlined Project into the Interstate Sales and Use Tax Agreement that was approved by the affirmative vote of nearly 30 states in November 2002, and have subsequently approved amendments to the Agreement in 2003, 2004 and 2005, and
WHEREAS, more than 20 states have passed legislation incorporating all or substantially all the simplifications called for in the Interstate Agreement into state sales tax law, and
WHEREAS, the number of states adopting the provisions of the Interstate Sales and Use Agreement has exceeded the thresholds required before activation of the agreement, and
WHEREAS, it is expected that an affirmative vote of Petitioning States will take place on July 1, 2005 so that the Agreement will be activated on October 1, 2005 and the Governing Board will be formed on that date, now, therefore, be it
Resolved, that the Federation of Tax Administrators recognizes the value of the Streamlined Sales Tax Project to state tax systems and to the state tax structure as a whole, and be it further
Resolved, that the Federation of Tax Administrators commends those who are working on the project for their efforts and applauds those states that have adopted legislation to conform to the Interstate Agreement, and be it further
Resolved, that states be encouraged to consider active participation in the project, in the Governing Board and in the State and Local Government Advisory Council, and be it further
Resolved, that the Federation of Tax Administrators will continue to provide support to the Streamlined Sales Tax Project, the Interstate Sales and Use Tax Agreement, to the Streamlined Sales Tax Governing Board, and other state efforts to simplify state and local sales and use taxes and their administration.
(Colorado and Florida abstain from vote)
This resolution shall automatically terminate three years after the Annual Business Meeting at which it is adopted, unless reaffirmed in the normal policy process.
Resolution Sixteen
WHEREAS, 41 states plus the District of Columbia impose an income tax on individuals and they all employ at least one avenue for the electronic filing of those returns, and
WHEREAS, increasing the volume of electronic-filed returns is critical to effective future operations and the cost of electronic filing through tax preparers is frequently cited by individuals as a barrier to electronic filing, and
WHEREAS, the Internal Revenue Service and an alliance of developers and tax preparation firms are renegotiating an agreement to promote electronic filing of federal returns without additional cost, and
WHEREAS, some members of the Free File Alliance provided free electronic filing in some or all states as part of their federal Free File offerings, and
WHEREAS, a similar alliance has been reached directly and individually with a number of states, and
WHEREAS, some states have expressed an interest in developing a coordinated state approach to working with Free File Alliance member companies, and
WHEREAS, there is a potential for taxpayer confusion and frustration if state and federal efforts to provide electronic filing, free or otherwise, are not coordinated and cannot be seen as virtually seamless by the taxpayer, now, therefore, be it
Resolved, that states are encouraged to work with the Free File Alliance and its members in order to make free electronic tax return filing available to its citizens, and be it further
Resolved, that state tax administrators believe that state and federal programs that offer free electronic filing should be coordinated to the extent possible to provide that the filing experience is as seamless as possible for taxpayers, and be it further
Resolved, the Internal Revenue Service and all interested private sector interests should be encouraged to work in a single, coordinated manner with those states who wish to partner with them, and be it further
Resolved, that the Federation of Tax Administrators offers its services and resources to assist in developing and implementing such an effort.
This resolution shall automatically terminate three years after the Annual Business Meeting at which it is adopted, unless reaffirmed in the normal policy process.
Resolution Seventeen
Consider State Systems When Modifying Federal Policies
WHEREAS, under the U.S. Constitution both federal and state governments have the right to establish their own, separate systems of taxation, and
WHEREAS, the large majority of states have traditionally conformed important aspects of their individual and corporation income taxes and estate taxes to the federal tax code as a means of easing the burden of compliance on taxpayers as well as simplifying administration and compliance for all parties, and
WHEREAS, this system of federal-state conformity has effectively created a tax base and tax system that is in many ways integrated and is effectively shared between the federal and state governments, and
WHEREAS, this integrated tax system means that changes to federal tax laws will often have a substantial fiscal and administrative impact at the state level,
WHEREAS, the U.S. Congress has recently enacted a series of changes in federal tax law that have had substantial impacts at the state level, including a phase-out of the federal estate tax, broadening of allowable deductions for retirement contributions and broadening the depreciation allowance for businesses, and
WHEREAS, failure to take into account the fiscal, administrative and policy implications for states of such changes lead to nonconformity, considerable new complexities and recordkeeping burdens for taxpayers and tax professionals as well as affected the state tax infrastructure, compliance programs and levels of service to taxpayers,
WHEREAS, there are often alternative ways to achieve federal changes to policy that minimize or eliminate any need for states to make adjustments to their own tax systems to keep the federal and state systems in harmony, now let it be
Resolved, that the state tax agencies respectfully urge Congress to formally consider the impact of federal tax measures on state income tax systems, and be it further
Resolved, that Congress be encouraged to identify federal tax actions that can lead to nonconformity and to estimate the impact of federal tax actions that lead to nonconformity, and be it further
Resolved, that states and taxpayers should work in concert to educate Congress on the effects of federal changes that force states to reduce conformity and to jointly seek the creation of procedures that will reduce or eliminate the need for such state action.
This resolution shall automatically terminate three years after the Annual Business Meeting at which it is adopted, unless reaffirmed in the normal policy process.
Resolution Eighteen
Federal Tax Reform
WHEREAS, the U.S. federal government has launched a comprehensive study of potential substantial changes to the federal system of taxation, and
WHEREAS, the new systems under debate include elimination of the federal income tax, creation of a value-added tax or creation of a national sales tax, and
WHEREAS, income tax systems in 41 states and the District of Columbia have been developed in coordination with the federal income tax system, and fundamental aspects of the state income tax, including third-party reporting by employers and compliance, are wholly dependent upon the federal income tax, and
WHEREAS, 45 states and the District of Columbia balance their income taxes and keep rates low by imposing a consumption taxes (for most, a retail sales tax or a gross receipts tax), and
WHEREAS, the states have different rates and bases for these consumption taxes, and
WHEREAS, any substantial federal tax reform will have a substantial fiscal and administrative impact at the state level, with many proposals resulting in a loss of the state income tax or loss of sovereignty in the matter of establishing a sales tax base or rates, and
WHEREAS, the state consumption tax systems could also be improved in important ways by creation of a carefully designed federal sales tax, and
WHEREAS, states have extensive experience in administration of consumption taxes, now, let it therefore, be
Resolved, that the state tax agencies respectfully urge Congress to take advantage of the expertise developed by states in administration of consumption taxes, and be it further
Resolved, that states respectfully urge Congress to carefully consider both the positive and negative effects of federal tax reform proposals on state tax systems, including generation of revenue estimates, and be it further
Resolved, that state tax agencies should seek opportunities to participate fully in the federal debate over tax reform.
This resolution shall automatically terminate three years after the Annual Business Meeting at which it is adopted, unless reaffirmed in the normal policy process.
Resolution Nineteen
Federal Legislation on Jurisdiction to Tax
WHEREAS, some Members of Congress and certain segments of the business community have promoted the adoption of federal legislation that would establish standards of nexus for state corporation income, franchise and other business activity taxes, and
WHEREAS, this legislation has most recently been introduced in the House of Representatives as H.R. 1956, and
WHEREAS, the legislation would impose a series of restriction on state jurisdiction to impose corporation income and other business activity taxes on entities doing business in the state, including extending the preemptive reach of Public Law 86-272 to sales of all property and services, and
WHEREAS, the legislation would further require that an entity have a physical presence in the state before a business activity tax could be imposed, and then create a series of carve-outs from the physical presence standard so that various types of property and activities are protected from taxation even though they constitute physical presence, and
WHEREAS, efforts to define nexus in federal law by detailing the level of physical contacts required by a taxpayer will necessarily lead to lengthy and expensive litigation to determine the full meaning of such laws and to challenge their limits, and
WHEREAS, efforts to define nexus in federal law will necessarily discriminate in their impact across types of industries, and
WHEREAS, the established policy of the Federation of Tax Administrators has been consistently and throughout its history against the creation of federal definitions of nexus, and
WHEREAS, defining nexus in federal law would upset the tenets of federalism and the system of shared authority and responsibilities long practiced by the federal and state governments, now, therefore, be it
Resolved, that the Federation of Tax Administrators urges Congress not to insert itself into the exercise of establishing nexus standards for state corporation income, franchise and other business activity taxes, and be it further
Resolved, that the Federation of Tax Administrators commits itself to working with states, representatives of the business community and others to simplify and improve the uniformity of state corporation income, franchise and other business activity taxes.
This resolution shall automatically terminate three years after the Annual Business Meeting at which it is adopted, unless reaffirmed in the normal policy process.
WHEREAS, S. 150, the Internet Tax Nondiscrimination Act, became law in December 2004 as P.L. 108-435, and
WHEREAS, this Act preempts states from imposing new taxes on charges for Internet access, preempts taxation of DSL access and intermediate telecommunications purchases by Internet Service Providers beginning November 2005, and in November 2007 eliminates the grandfather protection afforded those taxes that were in place when the original Internet Tax Freedom Act was passed in 1998, and
WHEREAS, the Act will expire in November 2007, and
WHEREAS, Congress included the sunset provision to allow it to fully revisit the matter when new and emerging technologies are better established and understood, and
WHEREAS, almost immediately after passage of the Act, efforts were launched by Congress to permanently impose the preemption of state taxes, in some cases including preemption of those taxes imposed by the grandfathered states, and
WHEREAS, the rapid pace of technological change makes it remains impossible to fully understand the consequences to state and local revenue systems of such a permanent preemption, now, therefore, be it
Resolved, that Congress be urged to respect the agreement and compromises made in the 2004 legislation and take no action to extend the Act or further preempt state taxation of charges for Internet access or intermediate telecommunications purchases.
This resolution shall automatically terminate three years after the Annual Business Meeting at which it is adopted, unless reaffirmed in the normal policy process.
WHEREAS, Congress is rewriting the 1996 Telecommunications Act, and
WHEREAS, a broad rewrite of 1996 act will affect broadcast radio and television, direct-to-home satellite radio and television services, and cable's offerings of television, telephone and Internet services, and
WHEREAS, telecommunications technology has advanced in the past decade in ways that could not have been foreseen in 1996, including the creation of high-speed Internet connections and Internet-based telephone service (Voice Over Internet Protocol), and
WHEREAS, one of the critical new issues to be considered in the rewrite of this Act will be the federal tax treatment of Voice Over Internet Protocol, and
WHEREAS, the Internet Tax Non-Discrimination Act (P.L. 108-435) specifically excludes VOIP from its preemption, freeing states to tax this phone service the same as any line phone service, and
WHEREAS, many states have specifically included VOIP in their telecommunications tax bases, and
WHEREAS, taxation of telecommunications provides a critical pillar in the foundation in the state fiscal systems, therefore let it be
Resolved, that as Congress considers all issues of updating federal telecommunications laws, it refrain from passing any definition or preemption that limits or abrogates states' rights to apply their telecommunications taxes to Voice Over Internet Protocol in a manner identical with other technologies used to provide telephone services.
This resolution shall automatically terminate three years after the Annual Business Meeting at which it is adopted, unless reaffirmed in the normal policy process.
Resolution Twenty-Two
Affirming the Validity of State and Local Tax Incentives
WHEREAS, in 2004, the U.S. Court of Appeals for the Sixth Circuit (which includes Ohio, Tennessee, Kentucky and Michigan), struck down an investment tax credit offered by Ohio as a violation of the Commerce Clause of the U.S. Constitution, in Cuno v. DaimlerChrysler, Inc., 386 F.3d 738 (6th Cir., 10/19/04), and
WHEREAS, various legislative and business interests have expressed concern that the Cuno decision might put all state and local tax incentives requiring local activity in jeopardy of being ruled unconstitutional, and have indicated a desire to have Congress explicitly authorize such incentives with a federal statute, and
WHEREAS, on May 18, 2005, a bill was introduced in each chamber of Congress (S. 1066 in the Senate and H.R. 2471 in the House of Representatives) that would authorize "any State to provide to any person for economic development purposes tax incentives that otherwise would be the cause or source of discrimination against interstate commerce under the Commerce Clause of the United States Constitution, except as otherwise provided by law," with specific limitations on what types of incentives were authorized, and
WHEREAS, sponsors of the bills worked with FTA and its members to improve the clarity and precision of the bill and to address concerns about the effects the bills might have on existing state and local tax incentives, and
WHEREAS, S. 1066 and H.R. 2471 represent a good faith effort to balance the states' interest in offering incentives and avoiding harmful discrimination against interstate commerce, while also ensuring the validity of incentives that fall outside the scope of the bill, now, therefore, be it
Resolved, that the Federation of Tax Administrators supports the introduction of S. 1066 and H.R. 2471 and will continue to work with the states and Congress to arrive at federal legislation that would protect state and local governments' interest in offering tax incentives.
(Florida abstains from vote)
This resolution shall automatically terminate three years after the Annual Business Meeting at which it is adopted, unless reaffirmed in the normal policy process.
Resolution Twenty-Three
Strengthening the Jenkins Act and Contraband Cigarettes Trafficking Act
WHEREAS, state tobacco tax enforcement is hindered by the illicit transportation of cigarettes between states and nations to avoid the proper payment of taxes, and
WHEREAS, the Jenkins Act, at 15 U.S.C. ¤¤375-378, is a federal statute that requires anyone selling cigarettes in interstate commerce to report those sales to the tobacco tax administrator for that state into which the sales are made, and
WHEREAS, the Contraband Cigarette Trafficking Act, at 18 U.S.C. ¤2341-2346, makes it a federal crime to distribute or purchase "contraband cigarettes," a quantity in excess of 60,000 cigarettes that bear no evidence of payment of applicable cigarette taxes, and
WHEREAS, states have long sought to strengthen the provisions of the Jenkins Act and the Contraband Act to better assist enforcement of state tobacco taxes, and
WHEREAS, states seek to expand the scope of those statutes to include tobacco products other than cigarettes and to lower the threshold of the Contraband, and
WHEREAS, bills have been introduced periodically in Congress that would effectuate some of the changes to the Jenkins Act and the Contraband Act sought by the states, now, therefore, be it
Resolved, that the Federation of Tax Administrators should continue to work with the states and with Congress to arrive at legislation that would enhance the states' enforcement of their tobacco taxes by strengthening the requirements of the existing Jenkins Act and Contraband Cigarette Trafficking Act.
This resolution shall automatically terminate three years after the Annual Business Meeting at which it is adopted, unless reaffirmed in the normal policy process.
Change to FTA Bylaws
WHEREAS, the bylaws of the Federation of Tax Administrators determine authority granted to the Board of Trustees, and
WHEREAS, the bylaws governing nominations to the Board have been found to lack specificity, and
WHEREAS, the bylaws do not specify that the Board has power and authority to approve the governing structure, bylaws or any official actions taken by any Section or other administrative group organized as part of the Federation,
WHEREAS, pursuant to Article VII of the Bylaws of the Federation, notice of a proposed bylaw change was provided to the membership of the Federation on April 5 2005, now, therefore, be it
Resolved, that the specific amendatory language contained in the notice provided pursuant to Article VII be adopted as approved changes to the bylaws of the Federation of Tax Administrators, effective immediately.