Testimony and Reports

December 2007

Testimony Before U.S. House Judiciary Subcommittee

On December 6, 2007, the House Judiciary Subcommittee on Commercial and Administrative Law held a hearing on H.R. 3396--The Sales Tax Fairness and Simplification Act. Steven Rauschenberger, past president of the National Conference of State Legislatures, testfied on the current status of the Streamline Sales and Use Tax Agreement in the states and the need for Congress to adopt the Sales Tax Fairness and Simplification Act (H.R. 3396), which gives states the authority to collect sales tax on remote sales.

To Download the PDF Version (19-pages) of Steven Rauschenberger Testimony, click here.

To visit the U.S. House Judiciary Committee Website, click here.

July 2006

Testimony Before Senate Finance Subcommittee

On July 25, 2006, the Senate Finance Subcommittee on International Trade held a hearing on "How Much Should Borders Matter?: Tax Jurisdiction in the New Economy." Speaker Rants of the Iowa House of Representatives, and the Co-Chair of the National Conference of State Legislatures Executive Committee Task Force on State and Local Taxation of Telecommunications and Electronic Commerce, testified about the current status of the Streamline Sales and Use Tax Agreement in the states and the need for Congress to adopt the Sales Tax Fairness and Simplification Act (S. 2152) and give states the authority to collect sales tax on remote sales.

Other speakers included: Daniel C. Noble of the Wyoming Department of Revenue, George S. Isaacson of Brann & Isaacson, Robert Benham of Balliet’s, LLC, and Gary Imig of Sierra Trading Post.

Download PDF Version (18-pages) Testimony of Speaker Rants. To view PDF files, you must install Adobe Acrobat Reader.

June 2006

Testimony Before House Judiciary Subcommittee

On June 13, 2006, the House Judiciary Subcommittee on Commercial and Administrative Law held a hearing on the "State Taxation of Interstate Telecommunications Services." Senator Rauschenberger, President of National Conference of State Legislatures, testified about the current status of state and local taxation of telecommunications services and the need for government at all levels to address telecommunications tax reform.

Other speakers included: Scott Makey of Kimbell Sherman Ellis, David Quam of the National Governors Association, and Steve Kranz of the Council On State Taxation (COST).

Testimony of Senator Steven Rauschenberger, Assistant Republican Leader, Illinois State Senate and President, National Conference of State Legislatures

May 2006

In June 2004, the Joint Cost of Collection Study (JCCS) was commissioned by a coalition of business and government organizations, which includes NCSL, to conduct a two-part study of state and local retail sales tax compliance costs in the United States. Phase I of the study sought to develop a baseline estimate of compliance costs.

On May 3, 2006, PricewaterhouseCoopers, LLP, released the results of the first phase of the JCCS. The study found that compliance costs vary according to the size of the retailer: 13.47 percent for small retailers (annual retail sales between $150,000 and $1 million) to 2.17 percent for large retailers (annual retail sales above $10 million)

Phase Two of the JCCS will develop an econometric model of sales tax compliance based upon the results of Phase I and will be released at a later date.

Cost of Collection Study

PricewaterhouseCoopers' Press Release

July 2004
“State and Local Sales Tax Revenue Losses from E-Commerce” (http://www.ncsl.org/print/press/Ecommerceupdates.pdf, Center for Business and Economic Research, PDF, 12 pages) updates two previous University of Tennessee studies in which researchers examined the effects of e-commerce on state and local government revenues. The latest report suggests that e-commerce has “been a less robust channel for transacting goods and services than was anticipated when we prepared the earlier estimates” but nonetheless found that “revenue erosion continues to represent a significant loss to states and local government.”

According to the report, state and local governments lost between $15.5 and $16.1 billion in 2003 as states are unable collect sales taxes from online sales. The trend is only supposed to increase, as the report projects that 2008 revenue loss for state and local governments would range between $21.5 billion and $33.7 billion, with the greatest losses occurring in states that rely most heavily on the sales tax as a revenue source.

Broken down, state governments stand to lose between $17.8 billion and $27.8 billion in 2008, while local governments will lose between $3.7 billion and $5.8 billion that year, according to the University of Tennessee study.

Meanwhile, Forrester Research, Inc., in a report ("The Growth of Multichannel Retailing", http://www.ncsl.org/print/press/forrester.pdf, PDF, 18 pages) prepared for NCSL and the National Governors Association, found that established “brick and mortar” stores, like Borders and Wal-Mart, are increasingly selling their goods online, transforming the whole notion of retailing by catering their business to tech-savvy consumers. Forrester credits today’s e-commerce boom with traditional Main Street stores’ effective use of the Internet rather than Web-only retailers like Pets.com. “With the exception of online sellers Amazon.com and eBay,” the study says, “the majority of online sales are by the same retailers that dominate offline sales.”

Internet sales at so-called “Multichannel” stores, such as Target and Sears, grew almost 60 percent in 2002 and 32 percent last year, whereas Web-based retailers grew only 13 percent in 2003. Thanks in part to the continued expansion of broadband technologies in U.S. homes, Forrester expects online retailing to grow annually at a rate of nearly 20 percent in the next five years and estimates Americans will spend nearly $230 billion online in 2008, or 10 percent of the nation’s total retail sales.

October 2003
Streamlined Sales and Use Tax Agreement: States' Efforts to Facilitate Sales Tax Collection From Remote Vendors. Hearing Before the House Judiciary Subcommittee on Commercial and Administrative Law (http://www.house.gov/judiciary/89635.PDF, PDF, 194 pages)

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