WHEREAS, this Sixty-eighth Annual Meeting of the Federation of Tax Administrators, held in Boston, Massachusetts, 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 Sixty-eighth 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 Commissioner Frederick Laskey, Host Committee leader Jennifer DeSimone and the Host Committee, now, therefore, be it

Resolved, that the delegates and guests in attendance at this Sixty-eighth Annual Meeting extend their sincere thanks and appreciation to Jennifer and all the members of the Host Committee for the time they devoted to furthering the common professional goals of all tax administrators.

WHEREAS, President John Chavez has dedicated attention to the affairs of the Federation of Tax Administrators during his months in office, and

WHEREAS, President Chavez has given freely of his time and energy, and

WHEREAS, the efforts of President Chavez have made a notable contribution to the work and operations of FTA, and

WHEREAS, President Chavez has facilitated the conduct of the business of the Sixty-eighth Annual Meeting of the Federation of Tax Administrators by his skill and courtesy as presiding officer of the general conference, and

WHEREAS, the president has been ably assisted by First Vice President Bill Remington, Second Vice President Gary Viken and Secretary Ruth Johnson, now, therefore, be it

Resolved, that the members of the Federation at this Sixty-eighth Annual Meeting express their personal appreciation and sincere thanks to President Chavez, First Vice President Remington, Second Vice President Viken and Secretary Johnson on this occasion.

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, Michael S. Hodges was selected the winner of the 2000 Award for Leadership and Service in State Tax Administration, and

WHEREAS, Mike serves as Deputy Secretary of the North Carolina Department of Revenue, and

WHEREAS, Mike has served in the field of tax administration for 34 years, holding positions of increasing responsibility until becoming Deputy Secretary in 1996, and

WHEREAS, Mike has been a leader in the development and implementation of an imaging project, guided the Department into an integrated tax system, piloted North Carolina's electronic filing system and provided leadership in the development of countless administrative improvements throughout the agency, now, therefore, be it

Resolved, that the Federation of Tax Administrators congratulate Michael S. Hodges on his outstanding achievement and recognize Mike as the recipient of the 2000 Leadership and Service in State Tax Administration Award.

WHEREAS, the Illinois Department of Revenue was awarded the 2000 FTA Training Award for its Computer-Based Technical Training program, and

WHEREAS, the award is made to a state revenue department for a program that has demonstrated excellence in training department employees, and

WHEREAS, created under the leadership of Director Glen L. Bower, the program "Computer-based Technical Tax Training" was cited by judges for its ease of use, and

WHEREAS, the program eliminates many continuing problems facing trainers such as meeting space and scheduling conflicts, and

WHEREAS, the program could be of considerable value to other state tax agencies, now, therefore, be it

Resolved, that the Federation of Tax Administrators congratulate the Illinois Department of Revenue on winning the FTA Training Award.

WHEREAS, the South Carolina Department of Revenue was awarded the 2000 FTA Leon Rothenberg Award for Taxpayer Service, and

WHEREAS, the award is made to a state revenue department for outstanding programs in taxpayer service and education, and

WHEREAS, the South Carolina Department of Revenue, under the leadership of Director Elizabeth Carpentier, created a coordinated pair of programs called taxsmART and SCnetFile, and

WHEREAS, the programs first educate young citizens about the purpose and value of taxes and then offers adult citizens advanced electronic filing alternatives, and

WHEREAS, these programs were cited by the judges for their "natural progression" and for their ability to "start people thinking of the revenue department in a different way," now, therefore, be it

Resolved, that the Federation of Tax Administrators congratulate the South Carolina Department of Revenue on winning the FTA Leon Rothenberg Award for Taxpayer Service.

WHEREAS, FTA Board of Trustees members Larry Fuchs, Susie Schaaf and B.D. Copping recently left the field of state tax administration, and

WHEREAS, each of these, 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.

WHEREAS, the power to define the state tax system is a core element of state sovereignty, and

WHEREAS, the United States Constitution establishes appropriate bounds to the sovereignty of the states in the tax arena, and

WHEREAS, the system of federalism that is defined by the United States Constitution further cedes to state and local governments the responsibility for supplying the majority of the daily services due to its citizens and residents and a vibrant state and local tax system is essential to meeting those needs, and

WHEREAS, the U.S. government has traditionally shown substantial deference to the tax sovereignty of the states, and

WHEREAS, there is an increasing number of groups seeking to preempt state taxation authority in particular areas, and

WHEREAS, federal preemption of state tax authority has the effect of establishing a preferred class of taxpayer and shifting the tax burden to other non-preferred taxpayers, and

WHEREAS, federal preemptions often have unintended consequences, now, therefore, be it

Resolved, that the Federation of Tax Administrators respectfully urges the Congress and the U.S. federal agencies to refrain from enacting measures, taking actions or making decisions which would abrogate, disrupt or otherwise restrict states from imposing taxes that are otherwise lawful under the U.S. Constitution or from effectively administering those taxes.

Opposed by California, Massachusetts and New York City

WHEREAS, Wedad Cassis served as the Federation of Tax Administrators as office manager for 15 years, and

WHEREAS, Wedad served state tax administrators with loyalty and devotion before retiring in 1995, and

WHEREAS, Wedad died unexpectedly at age 64, now, therefore, be it

Resolved, that the Federation of Tax Administrators express its sadness at Wedad's untimely death, and be it further

Resolved, that Wedad should be remembered by the FTA membership for her dedication and contributions to the profession of tax administration.

WHEREAS, the 105^th Congress passed legislation authorizing the states to participate in the federal refund offset program beginning in January 2000, and

WHEREAS, in the early months of the program, seven states have collected more than $10 million in delinquent state tax debts through this program, and

WHEREAS, a majority of states are expected to participate in this program within the foreseeable future, and

WHEREAS, Financial Management Service, a branch of the United States Treasury, has authority over all federal offsets, and

WHEREAS, Financial Management Services has worked closely and with the highest degree of professionalism with the states to implement the reciprocal refund offset program, now, therefore, be it

Resolved, that the Federation of Tax Administrators thank Financial Management Service for its diligent work in implementing this important program, and be it further

Resolved, that the Federation of Tax Administrators encourage the states to consider the value to their compliance efforts of participating in this program.

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 that must incorporate 2-D output capability in 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, 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 continued development and maintenance of 2-D barcoding standards as they move forward with its use.

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 adopted uniform schedules for the reporting of motor fuel tax information, now, therefore, be it

Resolved, that states be encouraged to consider the uniform guidelines, definitions and schedules adopted by the FTA Motor Fuel Section at its 1999 annual meeting, and be it further

Resolved, that states be encouraged to consider adopting the changes to the EDI Combined Reporting Map when implementing programs for the electronic filing of motor fuel tax returns.

WHEREAS, the Task Force on EDI Audit and Legal Issues for Tax Administration was established to identify and examine the impact of EDI and related business processes on the tax administration process, and

WHEREAS, the Task Force is composed of representatives of the Committee 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, 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, and

WHEREAS, the Task Force is currently reviewing issues related to sampling in sales and use tax audits, business-to-business electronic commerce, implementation of electronic exemption certificates and electronic filing of tax information, and

WHEREAS, the work of the Task Force is believed to provide a measure of consistency and uniformity for taxpayers and tax administrators alike, now, therefore, be it

Resolved, that the Federation of Tax Administrators congratulate the participating state and industry Task Force members who devote their time and efforts to examining the issues associated with emerging electronic business processes 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 issues associated with emerging electronic business processes and to share experiences and approaches with other states, and be it further

Resolved, that FTA members are encouraged to continue to actively participate in the work of the Task Force as it continues to examine those electronic business processes that affect the tax administration process.

WHEREAS, the Federation of Tax Administrators facilitated the formation of a task force of state tax administrators and taxpayer representatives to address the issues posed by the use of EDI technology and other similar business processes, and

WHEREAS, this Task Force is formally titled the Task Force on EDI Audit and Legal Issues for Tax Administration, and is composed of representatives of the Committee On State Taxation, Institute of Professionals in Taxation, Tax Executives Institute, Multistate Tax Commission, FTA and commissioners from several state tax administration agencies, and

WHEREAS, the Steering Committee of the Task Force has approved a Model Recordkeeping and Retention Regulation to govern taxpayer retention of books and records, particularly electronically generated and retained records, for tax administration purposes, 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 model regulation is believed to represent an appropriate balance between the interests of tax administrators and taxpayers, and

WHEREAS, the regulation will provide a measure of consistency and uniformity for taxpayers and will promote effective tax administration, and

WHEREAS, the states of Alabama, Arizona, California Board of Equalization, Connecticut, Florida, Georgia, Illinois, Iowa, Maryland, New Hampshire, New Jersey, South Carolina and Utah and the city of New York have adopted the model regulation in whole or in part, now, therefore, be it

Resolved, that the Federation of Tax Administrators thank all individuals who devoted their time and effort in developing and refining the Model Recordkeeping and Retention Regulation, and be it further

Resolved, that the Federation of Tax Administrators respectfully recommends that the remaining revenue agencies of the fifty states and District of Columbia use the Model Recordkeeping and Retention Regulation as a starting point when defining the record retention and maintenance requirements imposed under state tax statutes.

WHEREAS, the Federation of Tax Administrators facilitated the formation of a task force of state tax administrators and taxpayer representatives to address the issues posed by the use of EDI technology and other electronic business processes, and

WHEREAS, this Task Force is formally titled the Task Force on EDI Audit and Legal Issues for Tax Administration, and is composed of representatives of the Committee On State Taxation, Institute of Professionals in Taxation, Tax Executives Institute, Multistate Tax Commission, FTA and commissioners from several state tax administration agencies, and

WHEREAS, the Task Force has approved a Model Direct Payment Regulation that provides simplified, consistent rules for direct pay authorization and focuses on the business process of a taxpayer in determining whether direct pay authority should be granted and,

WHEREAS, the Task Force is interested in gaining widespread endorsement for this regulation and has requested that the Multistate Tax Commission consider the regulation as a uniformity recommendation to the states, and

WHEREAS, the regulation 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 thank all individuals who devoted their time and effort in developing and refining the Model Direct Payment Regulation, and be it further

Resolved, that the Federation of Tax Administrators respectfully recommends that its members examine the model regulation and consider using this regulation as a starting point when defining and/or amending the direct payment requirements imposed under state tax statutes, and be it further

Resolved, that the Federation of Tax Administrators respectfully encourages its members to work with taxpayers in addressing issues associated with the expanded use of direct pay authority and to share experiences and approaches with other states.

WHEREAS, the Federation of Tax Administrators facilitated the formation of a task force of state tax administrators and taxpayer representatives to address the issues posed by the use of EDI technology and other electronic business processes, and

WHEREAS, this Task Force is formally titled the Task Force on EDI Audit and Legal Issues for Tax Administration, and is composed of representatives of the Committee 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 published a Sales and Use Tax Compliance Agreements (SUTCA) white paper that 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, the SUTCA white paper 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 thank all individuals who devoted their time and effort in developing and refining the SUTCA white paper, and be it further

Resolved, that the Federation of Tax Administrators respectfully encourages its members to review the SUTCA white paper, to work with taxpayers in addressing issues associated with alternative reporting methodologies and to share experiences and approaches with other states.

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, the private network for the Suspicious Filer exchanges was officially terminated on June 30, 1998, due to the high cost of maintaining the service, 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, thirteen states have signed a Memorandum of Understanding and have agreed to utilize PGP Enterprise Software to exchange Suspicious Filer information via the public Internet, now, therefore, be it

Resolved, that state tax administrators be urged to evaluate and consider participating in the 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, TGCC has introduced an electronic service that is intended to facilitate communications among the Federation of Tax Administrators, the Multistate Tax Commission and their members, and

WHEREAS, the electronic service is accessible through the public Internet under the name of TaxExchange, and

WHEREAS, TaxExchange has been useful during the past year in providing significant and timely information on issues affecting the tax administration process, and

WHEREAS, the content of TaxExchange, as it is now constituted, will be controlled through a User ID/Password security system and limited to public and member information, and will not be used to host or transmit sensitive, non-public or confidential tax return or taxpayer-specific information, now, therefore, be it

Resolved, that state tax administrators be urged to evaluate and consider TaxExchange as a provider of tax-related informational resources within and among state revenue agencies and encourage its use by their employees, and be it further

Resolved, that state tax administrators are encouraged to undertake an active program of providing information, reports and other relevant products to TaxExchange as a means of making them available to other state tax administration authorities.

WHEREAS, states and the mobile telecommunications industry both acknowledge the difficulty of assigning a situs to mobile telecommunications services for purposes of imposing transactional taxes, and

WHEREAS, states and the mobile telecommunications industry both desire a workable method that is revenue neutral and administratively practical that would allow the situs of mobile telecommunications services to be determined, and

WHEREAS, the mobile telecommunications industry, under the leadership of the Wireless Tax Group, proposed a federal bill, the "Mobile Telecommunications Sourcing Act," which would assign all mobile telecommunications services a situs of the location of the place of primary use, and

WHEREAS, the industry worked closely with the states, the National Governors’ Association, the National Conference of State Legislators, the Multistate Tax Commission and the Federation of Tax Administrators, to craft a bill that would be acceptable to the states, local governments and the industry,

WHEREAS, bills acceptable to the states, local governments and the industry have been introduced in Congress as S. 1755, H.R. 3489 and H.R. 4391, now, therefore, be it

Resolved, that the mobile telecommunications industry be commended for its efforts in initiating this effort to simplify state tax administration, and be it further

Resolved, that the states be encouraged to continue to work with the industry and Congressional staff on the language of the bills that have been or will be introduced in Congress, in an effort to obtain the passage of legislation by Congress that carries the support of both the states and the industry.

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 Act to 30,000 cigarettes or an equivalent quantity of other tobacco products, 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, including, most recently, H.R. 2503 and H.R. 2493, 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.

WHEREAS, the continuing growth of interstate sales by mail order, electronic commerce and other direct marketing methods results in a competitive disadvantage for local businesses and results in a state and local revenue loss estimated to be $20 billion annually by 2003, and

WHEREAS, electronic commerce conducted via the Internet and other on-line services is growing dramatically, exacerbating the problem already exhibited by traditional mail order and other types of direct marketing, and

WHEREAS, the U.S. Supreme Court held in Quill Corp. v. North Dakota, 112 S.Ct. 1904 (1992) that physical presence is not required to establish state jurisdiction under the Due Process Clause, but that "substantial nexus" is required under the Commerce Clause to require an interstate seller to collect tax, and

WHEREAS, the Court further held that Congress may authorize states to require interstate sellers to collect appropriate sales and use taxes, 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 to avoid imposing an "undue burden" on interstate commerce, and

WHEREAS, states have undertaken a number of efforts to achieve this simplification and uniformity, including the National Tax Association Communications and Electronic Commerce Tax Project, the Northwest Regional Sales Tax Pilot Project, the Multistate Tax Commission Sales Tax Simplification Project, and

WHEREAS, more than 30 states are now involved in the Streamlined Sales Tax Project that has as its goal the development of a radically simplified sales tax administration system that will reduce the compliance burden for all types of retailers, now, therefore, be it

Resolved, that the Federation of Tax Administrators affirms its support of efforts to develop a modernized sales and use tax that is characterized by, among other things, substantially simpler and more uniform administrative procedures and requirements and an expansion of the duty to collect tax to some reasonable categories of interstate sellers that do not have substantial nexus in the states into which they sell, and be it further

Resolved, that the Federation of Tax Administrators should support the work of state tax administrators and other relevant groups involved in efforts toward the aforementioned goal, and be it further

Resolved, that the Federation of Tax Administrators encourages states, industry representatives and other involved parties to participate actively in efforts to simplify and improve the administration of state and local sales and use taxes.

Opposed by New York State, Massachusetts and Virginia.
California abstained from the vote.

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 to avoid imposing an "undue burden" on interstate commerce, and

WHEREAS, simplification of the sales and use tax will reduce the burden imposed on those now collecting the tax, and

WHEREAS, more than 30 states are now involved in the Streamlined Sales Tax Project that has as its goal the development of a radically simplified sales tax administration system that will reduce the compliance burden for all types of retailers, and

WHEREAS, the Streamlined Sales Tax Project has developed its operating rules, established its leadership, and begun in earnest the task of simplification, now, therefore, be it

Resolved, that the Federation of Tax Administrators recognizes the value of the Streamlined Sales Tax Project to their tax systems and to the state tax structure as a whole, and be it further

Resolved, that the Federation of Tax Administrators commend those who are working on the project for their efforts, and be it further

Resolved, that states be encouraged to consider active participation in the project.

Opposed by New York State

WHEREAS, Senator Judd Gregg of New Hampshire and Senator Herb Kohl of Wisconsin have introduced the "New Economy Tax Simplification Act" (S. 2401), and

WHEREAS, the bill would amend Public Law 86-272 to establish a new nexus standard in federal law for all business activity taxes as well as the collection of sales and use taxes, 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, 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, the bill is mischaracterized by those who would be favored by the bill as codifying the standard set forth by the U.S. Supreme Court in Quill v. North Dakota, and

WHEREAS, the U.S. Supreme Court held in Quill Corp. v. North Dakota, 112 S.Ct. 1904 (1992) that physical presence is not required to establish state jurisdiction under the Due Process Clause, but that "substantial nexus" is required under the Commerce Clause to require an interstate seller to collect tax, and

WHEREAS, the Court ruled that Congress is free under the Commerce Clause to allow the states to impose tax obligations taxpayers even when they do not have substantial nexus, and

WHEREAS, the bill establishes a requirement that a business have a "substantial physical presence" in a state before it could be subjected to a business activity tax or use tax collection obligation, and

WHEREAS, the bill additionally establishes 10 special conditions that would be deemed not to meet this substantial physical presence requirement, and

WHEREAS, these "carve-outs" include solicitation of orders for tangible or intangible property; presence or use of intangible property in a state; use of the Internet to create or maintain a web site accessible by persons in the state; use an Internet service provider to maintain, take, or process orders via a web site on a computer that is physically located in the state; use of a service provider to transmit communications (including cable, satellite, radio and telecommunications); and affiliation with a person in the state who is not an agent of the company, 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, and

WHEREAS, the nexus definitions expressed in S. 2401 would establish favored categories of taxpayers and differentiate among like groups of taxpayers, now, therefore, be it

Resolved, that the Federation of Tax Administrators urge Congress not to insert itself into the exercise of establishing nexus standards, and be it further

Resolved, that the Congress be urged to refrain from passing S. 2401.

Opposed by Virginia and Massachusetts. California abstained from the vote.

WHEREAS, the 105^th Congress passed legislation authorizing the states to participate in the federal refund offset program beginning in January 2000, and

WHEREAS, in the early months of the program, seven states have collected more than $10 million in delinquent state tax debts through this program, and

WHEREAS, the program has enjoyed a smooth implementation for government and citizens alike, and

WHEREAS, it has been the experience of tax administrators that taxpayers view offsets as the most accurate, least intrusive and least burdensome way available to satisfy a debt owed to government, and

WHEREAS, the current federal statutory authorization for federal refund offsets for state tax debts limits the program to individual income tax refunds being offset for individual income tax debts owed by current state residents, now, therefore, be it

Resolved, that the Federation of Tax Administrators respectfully urge Congress to consider the value to governments and taxpayers alike of expanding the refund offset program to allow states to offset for debts owed by taxpayers with legally established tax debts regardless of their current address, and be it further

Resolved, that the Congress further be urged to allow offsets for taxpayers who owe tax debts other than individual income taxes, and be it further

Resolved, that the Congress further be urged to allow offsets for state debts against any federal payment that is part of the federal offset match.

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 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 will be a searchable document, and

WHEREAS, more than 90 outstanding 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.

WHEREAS, Iowa Director Gerald Bair has dedicated the past 30 years to the taxpayers of Iowa, and

WHEREAS, Director Bair’s service was recognized by several governors as he was appointed state tax commissioner again and again, and

WHEREAS, this year, Director Bair has reached his 25^th year as Iowa’s State Tax Director, and

WHEREAS, Director Bair holds the record for serving the longest term as an active state tax commissioner, and

WHEREAS, Director Bair has contributed greatly to the Federation of Tax Administrators, now, therefore, be it

Resolved, that the members of the Federation at this Sixty-Eighth annual meeting express their congratulations to Commissioner Bair, "The Dean of FTA," for reaching this very special silver milestone.