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Task Force History

In March of 1999 the Executive Committee of the National Conference of State Legislatures established the special Task Force on State and Local Taxation of Telecommunications and Electronic Commerce to address the implications for state and local tax systems as a result of the rapid changes in technology and the emerging competitive telecommunications marketplace.  In 2001, the NCSL Executive Committee included in the Task Force’s jurisdiction, the review of state Business Activity Taxes and the relationship to a streamlined sales tax system.

The Task Force adopted in the July of 1999 a set of principles that led to the drafting of model legislation for the Streamlined Sales Tax Project and a year later for the Streamlined Sales Tax Implementing States.  Those principles are:

First, that state and local tax systems should treat transactions involving goods and services, including telecommunications and electronic commerce, in a competitively neutral manner; and

Second, that a simplified sales and use tax system that treats all transactions in a competitively neutral manner will strengthen and preserve the sales and use tax as vital state and local revenue sources and preserve state fiscal sovereignty; and 

Third, that the Internet and Internet vendors should not receive preferential tax treatment at the expense of local “main street” merchants, nor should such vendors be burdened with special, discriminatory or multiple taxes; and

Fourth, that states recognize the need to undertake significant simplification of state and local sales and use taxes to reduce the administrative burden of collection; and

Fifth, that under such a simplified system remote sellers, without regard to physical presence in the purchaser’s state, should be required to collect sales and use taxes from the purchaser and remit such taxes to the purchaser’s state; and

Sixth, that NCSL encourages current and future cooperative efforts by states to simplify the operation and administration of sales and use taxes; and

Seventh, that NCSL will continue to oppose any federal action to preempt the sovereign and Constitutional right of the states to determine their own tax policies in all areas, including telecommunications and electronic commerce.

On December 12, 2002, the Task Force met and unanimously voted to accept the Streamlined Sales and Use Tax Interstate Agreement and to request that the NCSL Executive Committee communicate with legislative leaders to urge their consideration of the Interstate Agreement during the 2003 legislative sessions.  The Executive Committee met on January 25, 2003 and unanimously approved this motion as well as an education outreach to all state legislators.  As of August 28, 2006, 21 states have enacted legislation to comply with the Agreement.

The Task Force also has jurisdiction over issues involving the Internet Tax Moratorium.