Capitol to Capitol | Vol. 22, Issue 3

2/2/2015

Capitol to CapitolEarlier today the president submitted his FY 2016 budget to Congress. Please check NCSL’s website later this week for a comprehensive overview of the budget proposal.

NCSL VOICES CONCERNS ON SALES TAX COLLECTION PLAN. “We believe [the Hybrid-Origin Sourcing model] tramples upon the 10th Amendment as it preempts state sovereignty to levy taxes on its own residents, establishes a new sub-national entity to govern the collection of remote sales taxes, and codifies for the first time, ‘taxation without representation.’” This is the response from NCSL leadership to Speaker John Boehner (OH) in a letter last week addressing a discussion draft from House Judiciary Committee Chairman Bob Goodlatte (VA) to collect states sales taxes on remote transactions. The letter notes Chairman Goodlatte’s disingenuous comments that the draft, titled the “Online Sales Simplification Act of 2015,” was vetted by all affected stakeholders, despite not consulting with elected state policymakers. In the hybrid-origin sourcing concept, interstate sales taxes would be collected at the location of the seller, not the consumer, which could raise taxes and increase federal authority while usurping states’ rights, along with a host of other problems outlined in the letter. At a public hearing on hybrid-origin sourcing held by NCSL’s State and Local Taxation Task Force last month, participants determined this proposal would not be a viable solution for the collection of sales taxes on remote transactions. NCSL is continuing a dialogue with members of Congress and interested parties to enact efairness legislation that addresses and solves the sales tax collection problem. NCSL staff contact: Max Behlke

GET THE SHOW ON THE ROAD. Similar to last year, funding for transportation and infrastructure projects will be one of the top legislative issues for both Congress and state governments. Last week, NCSL issued a statement to the Senate Environment and Public Works Committee on a hearing highlighting the importance of reauthorizing MAP-21. NCSL urged the committee to examine new funding streams for federal-aid surface transportation programs, to consider pilot programs for states, and to make all funding and financing options available to state legislatures. By the end of May, Congress will need to reauthorize surface transportation programs and also ensure the solvency of the Highway Trust Fund. A recent report by the Congressional Budget Office noted that as currently funded, the Highway Trust Fund faces a shortfall of $73 billion over the next five years, and increasing to $169 billion over 10 years. Several of the more prominent options being discussed by members of Congress to fix this funding gap are using revenues from repatriated corporate earnings, royalties from expanded energy production and raising the federal gas tax for the first time since 1993. The former would likely have to move in tandem with a corporate tax overhaul, while support for the latter appears minimal. States are already dealing with the impact of federal inaction. Arkansas, for example, has already cited “the uncertainty of federal-aid reimbursements” as the reason to delay several highway projects. Stay tuned. NCSL staff contacts: Ben Husch, Melanie Condon 

NCSL ENDORSES UMRA “FIX.” In a letter sent today, NCSL expressed appreciation to House and Senate co-sponsors for reintroducing legislation that would provide a clearer analysis of federal mandates on state and local governments. The Unfunded Mandates Information and Transparency Act (S. 189/H.R. 50), introduced last month by Senators James Lankford (OK) and Deb Fischer (NE) and Representatives Virginia Foxx (NC) and Loretta Sanchez (CA), would strengthen the 20-year-old Unfunded Mandates Reform Act, which has displayed limitations on accountability and transparency of federal mandates. Specifically, the Unfunded Mandates Information and Transparency Act would expand the scope of reporting requirements to include new conditions of grant aid and allow the Congressional Budget office to identify foreseeable indirect costs. Last week, the House Oversight and Government Reform Committee approved H.R. 50, and it’s expected to be brought to the full House floor this week. NCSL staff contact: Jeff Hurley


Capitol to Capitol is a publication of the National Conference of State Legislatures, the premier bipartisan organization representing the interest of states, territories and commonwealths. The conference operates from offices in Denver and Washington, D.C.