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HomeMy WebLinkAbout2000-088 CCRits adoption: Member Kay Tasman introduced the following resolution and moved RESOLUTION NO. 2000-88 RESOLUTION URGING SIMPLIFICATION AND FAIRNESS IN THE APPLICATION OF SALES AND USE TAXES WHEREAS, under current law, local retailers in the City of Brooklyn Center are required to collect sales and use taxes on transactions regardless of whether they are conducted over the counter, over the Internet, telephone, or by mail order, while out-of-state or remote sellers are under no such obligation; and WHEREAS, the primary barrier to collecting taxes on remote sales is the Supreme Court's 1967 ruling in National Bellas Hess, Inv. v. Illinois, which prohibits State and local governments from imposing a duty to collect on remote sellers in part because it would be overly burdensome and too costly to require them to figure out and remit sales taxes to thousands of different State and local governments that have different tax rates and other requirements; and WHEREAS, the Supreme Court reaffirmed the Bellas Hess decision in 1992 in its ruling in Quill Corp. v. North Dakota but clarified that Congress may authorize State and local governments to require remote sellers to collect their taxes in a manner that does not unduly burden interstate commerce; and WHEREAS, both Supreme Court decisions pre-date the Internet which has been the engine driving the explosive growth in electronic commerce. Business to consumer sales alone in this area are expected to surpass $184 billion nationally by 2004; and WHEREAS, current law has created an un-level playing field between local retailers and remote sellers, one in which remote sellers, who sell products over the Internet tax- free, have a competitive advantage over our local retailers, who are required by law to collect our sales taxes on over-the-counter sales; and WHEREAS, the City of Brooklyn Center depends on the State for funds derived from the sales tax to support a number of vital public services such as: police, fire, parks, and streets; and WHEREAS, the Advisory Commission on Electronic Commerce failed to reach the consensus required by law in developing recommendations to submit to Congress on whether and how sales taxes should be applied to electronic commerce and remote sales; and WHEREAS, in spite of the ACEC's failure to reach legitimate consensus, the Commission submitted recommendations to Congress calling the elimination of the local option sales tax on remote sales, and numerous exemptions and tax loopholes that would cost State and local government an estimated $30 billion annually; and WHEREAS, local and State governments across the nation acknowledge that their sales and use tax systems are too complex and burdensome for electronic commerce and remote sales, and they are working cooperatively to adopt model Legislation to radically simplify their tax systems for the 21st century so they can be easily applied to all commerce; and RESOLUTION NO. 2000-88 WHEREAS, numerous proposals have been introduced in Congress to implement some of the recommendations in the ACEC report, and the House Speaker and Senate Majority Leader have stated their intentions to approve Legislation this year extending the current 3-year moratorium on new taxes on Internet access fees, multiple and discriminatory taxes for an additional five years; and WHEREAS, there is no compelling need to extend the moratorium at this time since it is not scheduled to expire until October 2001, and since the Legislation endorsed by the Congressional leadership neither addresses the competitive disadvantage issue for local retailers nor the collection of taxes on remote sales for State and Local governments, which are the two most dominant issues in this debate. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center that the City of Brooklyn Center supports the simplification of State and local sales and use taxes, and urges states to move expeditiously to develop and approve model simplification Legislation that allows State and local sales and use taxes to be applied equitably to traditional retail and remote sales; and BE IT FURTHER RESOLVED, that Congress is urged to ignore the report and recommendations of the Advisory Commission on Electronic Commerce, and not to consider that Congress is strongly urged to approve Legislation that provides that once a state successfully implements sales tax simplification, it will trigger Congressional authorization granting that state the authority to require remote sellers to collect its State and local taxes. May 8, 2000 Gf~ Date Mayor Pro Tem Legislation BE simply IT extending the FURTHER current RESOLVED, moratorium; and ATTEST: ✓k~ City Clerk and upon vote being taken thereon, the following voted in favor thereof: Debra Hilstrom, The motion for the adoption of the foregoing resolution was duly seconded by member Robert Peppe Kay Lasman, Ed Nelson and Robert Peppe and the following voted against the same: none whereupon said resolution was declared duly passed and adopted.