2001 Annual Meeting Resolutions

Resolution One
Host State Appreciation

WHEREAS, this Sixty-ninth Annual Meeting of the Federation of Tax Administrators, held in Seattle, Washington, 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-ninth 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 Director Fred Kiga, Host Committee leader Vikki Riffe and the Host Committee, now, therefore, be it

Resolved, that the delegates and guests in attendance at this Sixty-ninth Annual Meeting extend their sincere thanks and appreciation to Director Kiga, Committee leader Riffe 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 William Remington has dedicated attention to the affairs of the Federation of Tax Administrators during his months in office, and

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

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

WHEREAS, President Remington has facilitated the conduct of the business of the Sixty-ninth 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 Gary Viken and Second Vice President Ruth Johnson, now, therefore, be it

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

Resolution Three
Robert Tangorre, 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, Robert F. Tangorre was selected the winner of the 2001 Award for Leadership and Service in State Tax Administration, and

WHEREAS, Bob serves as Chief Information Officer of the New York State Department of Taxation and Finance, and

WHEREAS, Bob has served in the field of tax administration for 28 years, holding positions of increasing responsibility until becoming CIO in 2000, and

WHEREAS, Bob has been a leader in the field of statistical sampling and computer assisted audits, designed the Department's first large scale and comprehensive management information system, developed approaches to matching multiple computer files to identify nonfilers, and provided leadership in the development of countless administrative improvements throughout the agency, now, therefore, be it

Resolved, that the Federation of Tax Administrators congratulates Robert F. Tangorre on his outstanding achievement and recognizes him as the recipient of the 2001 Award for Leadership and Service in State Tax Administration.

Resolution Four
Virginia Department of Taxation
Recipient of the FTA Management Award

WHEREAS, the Virginia Department of Taxation was awarded the 2001 FTA Management and Organizational Initiative Award, and

WHEREAS, the award is made to a state revenue department for a program that has demonstrated excellence in the improvement of the management and organization of the diverse responsibilities of a tax agency, and

WHEREAS, created under the leadership of Commissioner Danny M. Payne, the program "Partnership Project" was cited by judges for its scope and creativity, and

WHEREAS, the program focuses on several important facets of management, including customer relationships and performance measurements, 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 congratulates the Virginia Department of Taxation on winning the 2001 FTA Management and Organizational Initiative Award.

Resolution Five
California Franchise Tax Board
Recipient of the Compliance Award

WHEREAS, the California Franchise Tax Board was awarded the 2001 Award for Outstanding Compliance Program, and

WHEREAS, the award is made to a state revenue department for an innovative, creative and effective program in tax compliance, and

WHEREAS, the California Franchise Tax Board, under the leadership of Chair Kathleen Connell and Executive Officer Gerald H. Goldberg, created the "Integrated Nonfiler Compliance (INC) Project," and

WHEREAS, the program minimizes erroneous notifications, improves the effectiveness of customer notices, and enhances internal productivity and employee satisfaction, and

WHEREAS, this program was cited by the judges for its focus on performance measurements, originality of concept, and the fact that the program could be replicated without great difficulty and without a large expenditure of resources, now, therefore, be it

Resolved, that the Federation of Tax Administrators congratulates the California Franchise Tax Board on winning the FTA 2001 Award for Outstanding Compliance Program.

Resolution Six
Honoring Former Board Members
Mary Bryson, John Chavez, Muriel Offerman and Cate Zeuske

WHEREAS, FTA Board of Trustees members Mary Bryson, John Chavez, Muriel Offerman and Cate Zeuske 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.

Resolution Seven
Thanking Charles Collins and Diane Hardt

WHEREAS, Charles Collins of the North Carolina Department of Revenue and Diane Hardt of the Wisconsin Department of Revenue are co-chairs of the Streamlined Sales Tax Project, and

WHEREAS, the Project is of vital importance to the future of tax policies and tax revenues in the states, and

WHEREAS, they have dedicated incalculable time to providing leadership to the Project, and

WHEREAS, Diane and Charles have demonstrated great skill and expertise in advancing the goals of the Project, now, therefore, be it

Resolved, that the members of the Federation at this Sixty-ninth Annual Meeting express their personal appreciation and sincere thanks to Charles Collins and Diane Hardt for their outstanding work on behalf of all state tax administrators as co-chairs of the Streamlined Sales Tax Project.

Resolution Eight
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 that 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.

Resolution Nine
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 expected to be published on the FTA Web site in the near term, 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 as they move forward with its use.

Resolution Ten
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 adopted uniform guidelines, definitions and 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 2000 annual meeting.

Resolution Eleven
Motor Fuel Electronic Submissions

WHEREAS, the petroleum industry and state tax agencies desire to operate in the most effective and efficient manner, and

WHEREAS, the states recognize the potential importance to both industry and the states of the development of the IRS ExFIRS Project; and

WHEREAS, the ExSTARS and ExTOLE components of the project will potentially provide state-specific data on a more timely basis and more efficiently through electronic submissions, now, therefore, be it

Resolved, that states be encouraged to fully support the efficiencies that will result from ExFIRS/ExSTARS/ExTOLE programs adopted by the FTA Motor Fuel Section at its 2000 annual meeting, and be it further

Resolved, that states should consider adopting to the extent possible the ExSTARS data to eliminate a separate duplicate paper filing of that same data by industry.

Resolution Twelve
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 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 and business-to-business electronic commerce, 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 states of Alabama, Arizona, Arkansas, the California Board of Equalization, Connecticut, Florida, Georgia, Illinois, Iowa, Maryland, Michigan, New Hampshire, New Jersey, New Mexico, South Carolina and Utah and the city of New York have adopted the model regulation in whole or in part, and

WHEREAS, the Task Force is interested in gaining widespread endorsement for the Model Direct Payment Regulation and the Multistate Tax Commission has voted to adopt the regulation as a uniformity recommendation to the states, 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,

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.

Resolution Thirteen
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, seventeen 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.

Resolution Fourteen
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 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 become a searchable document, and

WHEREAS, more than 120 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.

Resolution Fifteen
Expanding the Refund Offset Program

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 first 18 months of the program, 18 states have collected more than $75 million in delinquent state tax debts through this program, and

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

WHEREAS, the program has proven itself to be effective, efficient, accurate and respectful of taxpayer rights,

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 urges Congress to amend 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.

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
Taxation of Mobile Telecommunications Services

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," that 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 Legislatures, 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, and

WHEREAS, the Mobile Telecommunications Sourcing Act was signed into law by President Clinton on July 28, 2000,

WHEREAS, many states will need to conform their existing statutes to the sourcing requirements of the Act, and the industry has offered to work with states in both drafting conforming bills and getting those bills through the respective state legislatures, now, therefore, be it

Resolved, that the mobile telecommunications industry be commended for its efforts in this simplification of state taxes, and be it further

Resolved, that each state should examine its laws regarding the taxation of mobile telecommunications services to determine changes necessary to implement the Mobile Telecommunications Sourcing Act, and be it further

Resolved, that the states be encouraged to work with the private sector on bills and regulations that would conform existing state law to the Mobile Telecommunications Sourcing 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.

Resolution Seventeen
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 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, 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.

Resolution Eighteen
Preemption of State Authority to Tax

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, and

WHEREAS, our system of federalism can result in substantial administrative compliance burdens for persons with tax responsibilities in multiple states, and

WHEREAS, many of the legitimate goals that might be pursued in preemptive legislation can be effectively achieved through cooperative state efforts and improved uniformity among the states, 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, and be it further

Resolved, that Congress should undertake an active program of consultation with states as it considers measures that would preempt state tax authority, and be it further

Resolved, that states should actively pursue such uniformity and simplification measures as are necessary and effective in addressing concerns of administrative burden in complying with the tax laws of multiple states.

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
Streamlined Sales Tax Project

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 any "undue burden" on interstate commerce, and

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

WHEREAS, more than 40 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, and

WHEREAS, eleven states have passed new laws implementing critical portions of the Streamlined Sales Tax Project, and legislation is under consideration in another 29 states, 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 commends 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.

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
Interstate Sales Tax Collections

WHEREAS, the continuing growth of interstate sales by mail order, electronic commerce and other direct marketing methods may erode state and local revenue, and

WHEREAS, the current pattern in which tax collection responsibilities may differ based on the manner in which the transaction is conducted may distort economic choices, and

WHEREAS, collection of sales and use tax at the time of the transaction will facilitate compliance among consumers, 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, and the Multistate Tax Commission Sales Tax Simplification Project, and

WHEREAS, more than 40 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.

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-One
Federal Legislation on Jurisdiction to Tax

WHEREAS, Senator Judd Gregg of New Hampshire and Senator Herb Kohl of Wisconsin have introduced the "New Economy Tax Fairness Act (S. 664), 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 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 a series of special conditions that would be deemed not to meet this substantial physical presence requirement, most of which would constitute a restriction on current law jurisdiction to tax by states, 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, 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. 664 would establish favored categories of taxpayers and differentiate among like groups of taxpayers, now, therefore, be it

Resolved, that the Federation of Tax Administrators urges 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. 664.

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
Extension of the Internet Tax Freedom Act

WHEREAS, the Internet Tax Freedom Act expires on October 21, 2001, and

WHEREAS, the Internet Tax Freedom Act imposes a moratorium on the imposition of new taxes on charges for Internet access and prohibits multiple and discriminatory taxes on electronic commerce, and

WHEREAS, Congress is considering various measures to modify and extend the Internet Tax Freedom Act, and

WHEREAS, electronic commerce business practices and electronic commerce technologies have changed since the enactment of the Internet Tax Freedom Act in 1998, and

WHEREAS, certain of those changes, when coupled with an extension of the Act, could have unintended consequences and expose state and local revenue systems to substantial adverse consequences, and

WHEREAS, Congress is using extension of the Act as a vehicle to examine the issue of collection of sales and use taxes by remote sellers not now required to collect tax on sales into a state, now, therefore, be it

Resolved, if Congress chooses to extend the Internet Tax Freedom Act, the Federation of Tax Administrators urges it to do so in accord with the following guidelines:

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
Change to the FTA Bylaws

WHEREAS, the bylaws of the Federation of Tax Administrators determine membership on the governing Board of Trustees, and

WHEREAS, the bylaws governing nominations to the Board have been found to lack specificity, and

WHEREAS, the bylaws do not insure diversity of participation among the four regions and between states of various sizes, and

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 March 26, 2001, 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.