On Wednesday, October 1, retail organizations and Colorado Governor Bill Owens testified before a House subcommittee at an oversight hearing regarding The Streamlined Sales Tax Agreement (H.R. 3184), a bill that would allow states to simplify sales tax, with equal tax treatment between local merchants and remote sellers. Congressmen Ernest Istook (R-OK) and William Delahunt (D-MA) introduced the legislation last Thursday.
While Governor Owens denounced the Streamline Sales and Use Tax Agreement (SSUTA) as "taxation without representation," as reported by the Rocky Mountain News, Tripp Funderburk, policy advisor to the e-Fairness Coalition told BTW that the groups testifying in favor of the bill -- Staples and the National Retail Federation (NRF) -- laid out a good case for taxing remote sales.
"I think there's broad recognition that [without a Streamlined Sales and Use Tax Agreement] this is unfair to Main Street retailers and
that this uncollected revenue is damaging state budgets and important services that they provide: homeland security, education, and public safety," he said. "I think that Staples and NRF did an excellent job explaining the progress made by states to simplify the complex state sales tax rules and procedures."
SSUTA will grant authority to a national simplification agreement already made last year by 34 states and the District of Columbia, which was also called SSUTA. The states' agreement outlined a comprehensive system to simplify the states' sales tax rules and dramatically reduce red tape for America's businesses. Since it was adopted last year, 20 states enacted legislation to change their tax laws and implement the requirements of that agreement. Furthermore, five other states have taken steps toward joining the agreement. At present, Colorado, New Mexico, and Hawaii have no plans to participate in SSUTA.
At the hearing, Maureen Riehl, vice president and state and government relations counsel for the NRF, disputed Governor Owen's contention that H.R. 3184 imposes a new tax. J. Craig Shearman, a spokesman for NRF, attended the hearing, and noted, "As Maureen responded, this is not a new tax," he said. Riehl explained that SSUTA would allow states to collect use tax that the consumer already owes the state, but is not collected. Additionally, it would level the playing field, as it would require certain online retailers not presently collecting sales tax, to do so.
In response to charges that H.R. 3184 would impose taxation without representation, Shearman explained that a Colorado retailer shipping an item to Maryland, for example, will charge the appropriate Maryland sales tax -- not Colorado sales tax. "The consumer pays the same sales tax as if they walked down the street and bought something at the corner store," he explained. "It's tax at the rate and terms and conditions set by their state legislation that the consumer gets to vote for."
The day before the subcommittee hearing, the National Conference of State Legislatures issued a response to Governor Owen's white paper, "Nine Problems With Taxing the Internet." To read NCSL's response, which was provided to subcommittee participants as well as the media, go to www.ncsl.org/standcomm/sctech/tax_misconceptions.htm. --David Grogan