• Mission & Governance
• Services Overview
• How to Get Involved
• Standing Committees
• NCSL Foundation

• Issue Areas: A-Z
• State-Federal Relations
• NCSL Standing Committees
• News from D.C. and the States

• About State Legislatures
• Elections, Campaigns & Redistricting
• NCSL's StateConnect Directory
• Web Sites

• Online Guide to NCSL Services
• Staff Sections and Networks
• Meetings & Professional Development
• Staff Directories

• Meetings Calendar
• Online Registration
• Meetings Home Page
• Legislative Summit

• Bookstore
• State Legislatures Magazine
• NCSL's StateConnect Directory

Fiscal Affairs Program

Resolutions of the Telecommunications Task Force

Committee: Executive Committee Task Force on State and Local Taxation of Telecommunications and Electronic Commerce

Title: Electronic Commerce and the State Sales and Use Tax

Type: NCSL Policy Resolution

Whereas, the Internet is a collection of computer networks that enables the user to communicate electronically with other users in states and around the world; and

Whereas, millions of organizations and consumers are engaging in electronic commerce through their Internet connection; and

Whereas, business-to-consumer sales transacted through the Internet are projected to exceed $100 billion in 2002, up from just $8 billion in 1998 and $ 1.5 billion in 1997; and

Whereas, businesses, consumers, and others engaging in interstate and foreign commerce through the Internet could become subject to complex tax structures in multiple jurisdictions; and

Whereas, the myriad state and local sales and use tax systems could place a significant administrative burden on remote sellers; and

Whereas, under current court decisions, some Internet vendors and other remote sellers cannot be legally compelled to collect sales and use taxes from consumers in other states; and

Whereas, the difficulties in requiring sales and use tax collections from remote sellers place local "main street" merchants at an unfair competitive disadvantage; and

Whereas, state sales and use tax revenues comprise, on average, one-third of state revenues and provide over half of state revenues in six states; and

Whereas, states have the primary responsibility for education, public safety, transportation, and health and human services; and

Whereas, the projected growth of electronic commerce transactions will have a substantial negative impact on state sales and use tax revenues; and

Whereas, state legislatures recognize the critical role that the telecommunications and information technology industries will continue to play in job creation and economic development; and

Whereas, state legislatures recognize that there is a need for a simplified and more uniform sales tax structure that is not an impediment to the growth and financial success of these industries;

NOW, THEREFORE BE IT RESOLVED that the National Conference of State Legislatures endorses the following principles governing sales and use taxes:

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.

Approved and adopted July 28, 1999 in Indianapolis, Indiana.

Visitor counts for this page.