HomeMy WebLinkAboutResolution 2000-002
RESOLUTION NO. 2000-02
RESOLUTION AFFIRMING SUPPORT FOR NEUTRAL TAX TREATMENT OF
INTERNET PURCHASES
WHEREAS, state and local governments rely on sales tax revenues to pay for
public services related to public safety, education, infrastructure maintenance, social
programs and other quality of life services; and,
WHEREAS, sales tax comprises nearly half of the revenues collected by states
and distributed by local governments; and,
WHEREAS, state and local governments have experienced difficulty in collecting
sales tax on purchases made from out-of-state businesses, known as remote sellers;
and,
WHEREAS, the growth of the Internet has increased the ease with which
consumers can engage in remote sales; and,
WHEREAS, Forrester Research projects that Internet sales will jump from $13
billion in 1998 to $108 billion in 2003, which is 6% of all retail spending; and,
WHEREAS, this migration of sales and resulting erosion of sales and use tax
revenues is restricting the ability of state and local governments and school districts to
collect taxes which finance essential public services; and,
WHEREAS, the United States Congress enacted the Internet Tax Freedom Act
of 1998 which pre-empts state and local authority by establishing a moratorium on the
imposition of E-commerce related taxation, and created an Advisory Commission on
Electronic Commerce charged with making recommendations for future Congressional
action; and,
WHEREAS, the Internet Tax Freedom Act discriminates against citizens without
Internet access because these individuals will continue to be obligated to pay sales tax
on purchases from local stores, while consumers with the means to afford the
necessary technology for making Internet purchases will not be required to pay sales
tax; and,
WHEREAS, retailers engaging in E-commerce will experience unfair competitive
advantage over local "Main Street", or "bricks and mortar" businesses if the Internet Tax
Freedom Act is made permanent; and,
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WHEREAS, 99 percent of the goods and services purchased over the Internet
are bought using credit cards and other electronic payment mechanisms which offers
opportunities to collect existing taxes in non-discriminatory and efficient ways; and,
WHEREAS, the National Governor's Association estimates that state and local
sales tax could decrease by as much as 20% by 2003 if the Internet Tax Freedom Act is
made permanent; and,
WHEREAS, the City of North Richland Hills is a member of the National League
of Cities, and the National League of Cities is launching a multi-year education and
advocacy effort to increase education and understanding of the electronic marketplace
and develop policy recommendations that will help shape the debate at the end of the
three-year moratorium on taxing online transactions; and,
WHEREAS, there are three key messages guiding this campaign:
· State and local leaders strongly support technology advances and the
opportunities offered by electronic commerce. At the same time, we
must protect local retailers from unfair competition and to preserve tax
bases needed to deliver basic and expected government services.
· Charqinq sales tax for online purchases of traditional qoods does not
represent new taxes. A book purchased off a shelf and a book
purchase online are and should be subject to the same taxes.
· Convenience, not tax avoidance, is what lures consumers to online
purchasinq. Therefore, it is safe to assume that charging sales tax for
traditional purchases will not stymie the growth of this new
marketplace, Moreover, it is absolutely clear that state and local sales
taxes have in no way restricted the phenomenal growth of the leading
e-commerce companies. Federal legislation should not create a
protected class of taxpayers at the expense of Main Street businesses
and other taxpayers; and,
WHEREAS, it is important that cities make their concerns known to our U. S.
Senators and Congressmen, state legislators, Governor and Lieutenant Governor; and,
WHEREAS, the advisory commission on Electronic Commerce will consider
proposals to address E-commerce related taxation issues, including one jointly
submitted by the National Governors' Association, Council of State Governments,
National Conference of State Legislators, National Association of Counties, US
Conference of Mayors, National League of Cities, and the International City/County
Manager's Association entitled "Streamlined Sales Tax System for the 21 st Century";
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NOW THEREFORE BE IT RESOLVED by the Mayor and City Council of the City
of North Richland Hills, Texas that:
1. The City of North Richland Hills does hereby support the reasonable
application of sales tax on applicable products and services purchased
through electronic commerce, to ensure equitable treatment of retailers
physically located in North Richland Hills and preservation of the local tax
base needed to deliver basic and expected government services.
2. The City of North Richland Hills hereby opposes attempts by the United
States Congress to enact further legislation that might pre-empt the authority
of state and local governments, and
3. The City of North Richland Hills hereby supports the "Streamlined Sales Tax
System for the 21st Century" submitted on behalf of states, regional and local
government officials, and
4. The City will participate in educational and advocacy efforts as outlined by the
National League of Cities and will communicate with state and local officials
regarding this important issue.
PASSED AND APPROVED this 10th day of January, 2000.
APPROVED:
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Charles Scomcl- Mayor
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APPROVED AS TO FORM AND LEGALITY
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Rex McEntire - Attorney for t e City
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