2003 FTA Resolutions
Ratified
by the Board of Trustees June, 2003
Resolution One
Host State Appreciation
WHEREAS, this Seventy-First Annual Meeting of the Federation of Tax Administrators, held in Oklahoma City, Oklahoma, 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-First 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 Kemp, Commissioner Johnson and Commissioner Irby, Host Committee leader Shropshire and the Host Committee, now, therefore, be it
Resolved, that the delegates and guests in attendance at this Seventy-First 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 Stephen Cordi has dedicated attention to the affairs of the Federation of Tax Administrators during his months in office, and
WHEREAS, President Cordi has given freely of his time and energy, and
WHEREAS, the efforts of President Cordi have made a notable contribution to the work and operations of FTA, and
WHEREAS, President Cordi has facilitated the conduct of the business of the Seventy-First Annual Meeting of the Federation of Tax Administrators by his skill and courtesy as presiding officer of the general conference, now, therefore, be it
Resolved, that the members of the Federation at this Seventy-First Annual Meeting express their personal appreciation and sincere thanks to President Cordi on this occasion.
Resolution Three
Tremaine Smith, 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, Tremaine Smith was selected the winner of the 2003 Award for Leadership and Service in State Tax Administration, and
WHEREAS, Tremaine serves as Assistant Director of the Audit Division of the Washington State Department of Revenue, and
WHEREAS, Tremaine has served in the field of tax administration for 25 years, holding positions of increasing responsibility, and
WHEREAS, Tremaine has played an active role in representing the state of Washington on a variety of state, regional, and national sales and use tax simplification efforts, including the Advisory Commission on Electronic Commerce, Northwest Sales Tax Pilot Project and the Streamlined Sales Tax Project, and
WHEREAS, Tremaine has provided leadership as an Out-of-state Audit Manager, Field Audit Manager, Program Manager for Taxpayer Services, and Project Sponsor of the Data Warehouse Project, now, therefore, be it
Resolved, that the Federation of Tax Administrators congratulates Tremaine Smith on his outstanding achievements and recognizes him as the recipient of the 2003 Award for Leadership and Service in State Tax Administration.
Resolution Four
California Franchise Tax Board
Recipient of the FTA Award for Training
WHEREAS, the California Franchise Tax Board was awarded the 2003 FTA Award for Training, and
WHEREAS, the award is made to a state revenue department for a program that has demonstrated excellence in training department employees, and
WHEREAS, the agencyÕs internal training program for employees who work with the stateÕs new Integrated Nonfiler System was cited by judges for its winning attitude, and
WHEREAS, the program includes an Internet component, CD-ROM segments and a video as well as printed materials, thus incorporating different media to address the different patterns of learning, and
WHEREAS, this approach could be of value to other state tax agencies, now, therefore, be it
Resolved, that the Federation of Tax Administrators congratulates the California Franchise Tax Board on winning the 2003 FTA Award for Training.
Resolution Five
Wisconsin Department of Revenue
Recipient of the Leon Rothenberg Award for Taxpayer Service and Education
WHEREAS, the Wisconsin Department of Revenue was awarded the 2003 Leon Rothenberg Award for Taxpayer Service and Education, and
WHEREAS, the award is made to a state revenue department for an outstanding program in taxpayer service and education, and
WHEREAS, the Wisconsin Department of Revenue developed the ÒReVITALization Initiative,Ó a program that helps taxpayers in poor, non-English-speaking and under-served neighborhoods prepare their income tax returns and file electronically at no charge, and
WHEREAS, the program assists many individuals who could not have afforded tax assistance elsewhere, forming partnerships with volunteer community organizations to better serve non-English speaking customers, and
WHEREAS, this program was cited by the judges for its low cost and high creativity, now, therefore, be it
Resolved, that the Federation of Tax Administrators congratulates the Wisconsin Department of Revenue on winning the 2003 Leon Rothenberg Award for Taxpayer Service and Education.
Resolution Six
Honoring Former Board Members
Ruth Johnson, Fred Fisher, Janet Ancel, Elizabeth Carpentier,
Glen Bower, Larry Williams, Bill Remington and Stan Arnold
WHEREAS, FTA Board of Trustees members Ruth Johnson, Fred Fisher, Janet Ancel, Elizabeth Carpentier, Glen Bower, Larry Williams, Bill Remington and Stan Arnold recently left the field of state tax administration, and
WHEREAS, these men and women, 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
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.
Resolution Eight
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.
Resolution Nine
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, checklists, web page standards 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, checklists, web page standards and schedules adopted by the FTA Motor Fuel Tax Section at its 2002 annual meeting.
Resolution Ten
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, 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 (7) an educational document on sampling which is supplemented with a summary of state sampling practices, and
WHEREAS, the Task Force is currently reviewing issues related to 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 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, 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.
Resolution Eleven
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, 20 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 Twelve
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, FTAÕs 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 142 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 Thirteen
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 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,
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
WHEREAS,
nearly 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 is approaching the thresholds required before activation
of the agreement, 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,
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 and other state efforts to simplify state and local sales and
use taxes and their administration.
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 Fourteen
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,
each of the proposals that have been discussed would, to varying degrees,
restrict the jurisdictional reach of state income, franchise and other business
activity taxes when compared to current law, 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, the Internet Tax Freedom Act expires on November 1, 2003, 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
its extension in 2001, 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, 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.
WHEREAS, the continuing growth of interstate sales by mail order, electronic
commerce and other direct marketing methods is eroding state and local revenue,
and
WHEREAS,
the current pattern in which tax collection responsibilities 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,
states, the business community and the Congress have all recognized the
need for greater simplification and uniformity in the administration of sales
and use taxes as a prelude to a federal grant of authority to states to require
remote sellers to collect tax, and
WHEREAS,
the Interstate Sales and Use Tax Agreement approved by the Implementing
States of the Streamlined Sales Tax Project in November 2002 will substantially
reduce the burden involved in collecting sales and use taxes for remote sellers
as well as other types of retailers, and
WHEREAS,
states are moving aggressively, with the support of the business community,
to conform their sales tax laws to the provisions of the Interstate Sales
and Use Tax Agreement, now, therefore, be it
Resolved,
that the Federation of Tax Administrators urges Congress to enact legislation
that would authorize those states conforming to, and accepted as members of,
the Interstate Sales and Use Tax Agreement to require interstate sellers that
do not have substantial nexus in the state, but do have an annual national
sales volume above some reasonable threshold, to collect tax in the states
into which they sell, and be it further
Resolved,
that the authority to require remote sellers to collect tax should not require
adoption of specified standards of nexus for other types of state and local
taxes, but should be contingent on adoption, through state or federal law,
of a requirement that collection and remittance of sales and use taxes, in
and of itself, should not be considered a factor in determining nexus for
other state and local 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 Seventeen
Free Electronic Filing Services
WHEREAS, all 41 states and the District of Columbia that employ a broad-based personal income tax provide at least one avenue for the electronic filing of income tax returns, and
WHEREAS, increasing the volume of electronic-filed returns is critical to effective future operations in both state tax administration agencies and the Internal Revenue Service, and
WHEREAS, the cost of electronic filing through tax preparers is frequently cited by individuals as a barrier to electronic filing, and
WHEREAS, new technology now allows governments to provide these traditional filing services via the Internet in a way that minimizes common form-completion errors and eliminates the direct cost to taxpayers of electronically filing their income tax returns, and
WHEREAS, over 25 states offered free direct e-filing programs for some taxpayer populations in 2003, and
WHEREAS, the IRS has entered into an arrangement with various
tax preparation and software companies, known collectively as the Free File
Alliance, to provide free electronic filing in 2003 to particular taxpayer
populations, and
WHEREAS, several states also entered into arrangements with some members of the Free File Alliance to provide free electronic filing at the state level, 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, 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 seen as virtually seamless by the taxpayer, and
WHEREAS, certain electronic filing private sector interests have indicated a willingness to offer free state electronic filing to certain taxpayers only if the state tax agencies discontinue offering their traditional services of forms guidance, fill-in completion and tax calculation via the Internet, now, therefore, be it
Resolved, that state tax administrators assert it is their responsibility
to improve the tax agency's delivery of services to all taxpayers in ways
that reduce cost, eliminate errors and relieve the burden on taxpayers and
also respect taxpayer privacy and security of the data, and be it further
Resolved, that the tax agencies plan to continue to offer services
and use whatever technologies they consider to be in the best overall interest
of all taxpayers, and be it further
Resolved, state tax administrators believe that state and federal programs offering free electronic filing should be coordinated to provide that the filing experience is as seamless as possible for taxpayers, and be it further
Resolved, that the Federation of Tax Administrators encourages the Free File Alliance and the Internal Revenue Service to develop a program for involving states desiring to do so in the Free File effort, 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.