Present: Mark Schuling, Dave Casey, Jay Turner, Andy Warren, Jim Henter, Ed Wallace, and Ross Larson. Kristi Magill, Dave Krutzfeldt and Jerry Fleagle joined the meeting via conference call. Jim Miller from the Attorney General's Office and Larry Paxton, Jeff Aten and Darwin Clupper from the department were in attendance.

I. Welcome & Opening Comments.

Mark opened the meeting at 10:05 AM.

II. National Meetings in Dallas , TX (Dec. 10-12, 2007).

A. BAC

Kristi Magill remarked that the bulk of the BAC meeting was on direct mail and sourcing.

B. SLAC/Governing Board

Dave Casey indicated that the SLAC meeting was much like the BAC meeting. Most of the discussion was related to direct mail and sourcing.

Dave reported on three workgroups:

1. Florists Workgroup - A temporary exception from destination sourcing for “florist sales” through December 31, 2009. The main problem is with large national companies called “Order Gathers.” Whatever is decided for the Florists, it should not further complicate bringing Order Gatherers under the agreement, particularly following Congressional action.

2. Sales Price Workgroup – Services vs. tangible personal property. This group is all over the board. This workgroup will be surveying states.

Kristi indicated that direct mail issues need to be addressed in this working group.

3. Maintenance and warranty contract Issues – Iowa is different because we have special provisions. This is a new workgroup.

There was a little discussion on services. It wasn't known if they're going to get a work group together or not. Casey indicated they need to address this issue.

At the Governing Board meeting, some new rules were passed.

Wyoming and Arkansas become full member states effective January 1, 2008. Nevada will become a full member state effective April 1, 2008, and Washington effective July 1, 2008. As of July 1, 2008, nineteen states will be full member states.

III. Direct Mail.

This was deferred again in Dallas. Kristi indicated BAC submitted comments to SLAC on their work. BAC sees it as good work but there are still a couple of outstanding issues before they would be in agreement to SLAC proposals.

IV. Sourcing.

A Sourcing Amendment passed in Dallas. Dave provided a copy of the approved motion and reviewed with the Advisory Council. It creates a new section 310.1. The new provision will allow an alternative origin sourcing for in-state sales only. Kristi believes the majority of BAC does not agree with these proposals, but it passed anyway to keep the project alive. The different proposals also created of a lot of discussion on federal legislation. The Governing Board questions what the project can do to get Congress to look at federal legislation.

V. Update on Legislation & Rules.

Dave provided the update. So far this year, amendments that have occurred would not require legislation. On the rules side, the department is finishing up 2007 legislation and then more work on Streamlined rules will occur.

VI. Update on Registration & Revenue Tracking.

Larry Paxton provided an update. There are 1,070 sellers registered. Of those, 57 are model 1's; 92 are model 2's (He's not positive these are actually model 2's. The Streamlined Registration Office will try to determine accuracy.) The remaining 917 are model 4's.

The amount collected in the third quarter was $2,519,000.

VII. Analysis Required by Iowa State Legislature Regarding Impact on Iowa Businesses.

The Advisory Council discussed the need to pursue the vendor compensation issue since it hasn't been addressed at the national level. Dave suggested that we use the Annual Report to the Legislature as a vehicle to educate the Legislators. Kristi will provide the first draft of the Annual Report. Kristi supports putting some legislation together, but the figures are in question. In the National Cost of Collection Study, the figures are not the same as the Advisory Council Sub-committee's. From a legislative perspective, it would be best if we could provide a figure. The Advisory Council has struggled with this in last year's report and again for this year's. The Sub-committee also had difficultly coming up with a figure.

There was discussion that Advisory Council representatives of associations may need to go to their members. Ed Wallace asked if any other states had a methodology. Some states do but no one knew which states. The Council needs to focus on retailers affected by the change and what was the cost of businesses to switch. If anyone has any ideas, please keep Kristi in the loop. She'll include it in the Annual Report.

It was also suggested that one thing might be to bring Jay Turner in to discuss with Legislators to educate them as one of those retailers affected by this project.

In Dallas, Iowa stood up for vendor compensation and Iowa was the only state standing. Representative Rants spoke out for vendor compensation; but at the end of the day, Iowa was alone.

VIII. 2007 Annual Report to the Legislature.

As stated previously, Kristi will provide the first draft.

IX. Future Streamlined Sales Tax National Meetings.

A. Washington , D.C. – Due to the possibility of federal legislation, the next national meeting will be held the end of March in D.C.

B. Chicago , IL – End of June or early in July

C. Charleston , WV – Possibly the week after Labor Day for the Annual Meeting

The Governing Board is looking at just meeting three times a year in 2008.

X. Set Next Advisory Council Meeting.

The Council won't meet until after the next national meeting. There may be a conference call in January to discuss the annual report and/or the vendor compensation issue.

XI. Adjournment.

Mark adjourned the meeting at 11:15 AM .