December 3, 2003, Meeting Minutes
Mike Ralston, Co-chair, called the meeting to order. Warren Townsend and Lucy Hardy joined the Council via teleconference. Steve Roberts is a new member of the Advisory Council.
Kristi Magill, Co-chair, gave an update on federal legislation. SSTP has been introduced in the House and Senate. It has a wide sponsorship in the Senate. House support is a little slower with questions on software and Governing Board going unanswered. The Internet bill has lapsed. There’s talk on the Hill to link the Internet bill and streamlined sales tax in January or February. The Department supports that the two bills stay separate.
Mike introduced the caucus staffers who have been attending the Advisory Council meetings. He thanked them for finding time in their busy schedules to attend.
Kristi updated the Council on Phoenix Meetings and discussed the following:
- The software model is being worked on.
- Amendments were made to the Agreement so implementing states can move forward on RFP for purposes of selecting CSP’s. RFP is to be drafted in January and the goal is to issue by March 2004. Contracts in place by June and implemented in July. Basic criteria will be available in January.
- Cost of Collection Study – A joint effort with government and businesses forming a steering committee. If anyone has any input especially as it my impact small or mid size businesses, let Don or Kristi know.
Don summarized the Phoenix meeting also as follows:
- The Working Group met for two days and discussed the following issues.
- Holiday Definitions – Discussion centered primarily on what should be defined as a school supply. Since Iowa’s sales tax holiday is for clothing, this definition of school supply does not impact Iowa.
- Exemption Administration – No real change to discussion on exemption certificates or exemption administration. It was discussed and agreed that a seller would have 6 months to get an exemption certificate from the date of transaction to avoid being liable for any tax due.
- Bundling, Digital Equivalent of TPP & Telecommunications Definitions – Very little progress was made on any of these issues. Most involve tweaking proposed definitions that currently do not exist in the Agreement. We are a ways away from getting resolution of many of these issues. For telecommunication issues, there is some stake based on what is happening with internet access definitions at the federal level.
- Sourcing of Services – It was decided that only a few states tax professional services such as accounting and legal. Therefore, those states will get together to reach agreement on how to source certain complex transactions affecting these professions. Most of the rest of the sourcing of services are pretty basic and most occur where the service is performed.
- Implementing States Meeting was for one day with the following discussed.
- First was an update of state legislation. No real change with the exception that California is now an SSTP Implementing state participant.
- Sourcing of Florist Sales – An amendment to the Agreement was passed that would allow florists to continue to source on an origin basis until December 31, 2005. Question arises whether that requires any legislative change from states that have already passed conforming legislation.
- Governance Issues – There was considerable discussion about attempting to get a Governing Board up and running before the effective dates of conforming legislation passed by the states. Several proposed amendments were offered to the Agreement and what was finally agreed to was to change the Rules of Procedure of the Implementing Sales to set up a Conforming States Committee to begin creating the administrative mechanism and staffing necessary to implement the Agreement. No authority would exist to amend the Agreement. That authority will continue to rest with the Implementing States.
- Digital Equivalent of Tangible Personal Property – Any change to the definition was deferred until the January meeting.
Rod updated on Remitting and Reporting Local Option tax. The issue is composite or single rate. Iowa is a single rate state. So far, we’re in the majority as a single rate state.
Streamlined returns will include the following tax categories:
1. Tax on goods in-state
2. Tax on goods outside of the state
3. Goods consumed
The Department will need to decide if we’ll modify our returns. We would like some feedback. By January meeting we’ll have streamlined return. Also need to decide if consumers use tax can be remitted on the same return.
Jurisdiction Database – Kansas will be ready in January. We’ll use their database as a learning tool. Iowa needs to have ours ready by July 1, 2004. Another part of these databases is we need to be able to download to retailers or a retailer can create their own database and IDR will approve.
Steve Roberts had a question about exemption certificates – Not much change at this point. If we went mandatory, there might be some change.
Certificate of Compliance Checklist – Ours is done and has been submitted for review at the Phoenix meeting. Representatives of COST and the business community will review. If you want a copy, please let us know. North Carolina also completed this process.
The timeline for states that feel they have passed conforming legislation to get certification of compliance is expected to occur between now and March. Then, any legislative changes that need to be made can be made this legislative session. Assuming further legislation is not necessary, approval and certification could occur as early as March 2004.
Dick Koberg questioned whether we have any legislative changes. Casey indicated that we have three legislative items in our Policy bill. Kristi Magill and Susan Haffield of PricewaterhouseCoopers LLP, will review and might identify any other possible legislative items. We will make Update of State Legislation an agenda item for future Advisory Council meetings.
Rules – We will leave existing rules in place. We’re taking existing rules and making changes. Darwin will post on the website.
Final stages for design for accepting electronic registration. This will be done prior to Christmas. We can’t do much with returns until January technology meeting.
E-filing of sales tax returns – filing for all retailers. Standardize returns for SSTP retailers.
Education and Notification of Law Changes – Mike provided a handout of potential ways to notify retailers of the changes. Provide feedback to him at anytime. If you’re willing to partner with us to provide presentations, please let him know. It was suggested to add Chambers of Commerce to the list of Business Organizations and that the Iowa Society of Association Executives might be a good source of groups.
Calendar-year report to delegates as required by H.F. 683. This year’s report will indicate the development of the Advisory Council. It will be somewhat brief and indicate the progress we’ve made so far. Don will draft and have it out in advance of the Advisory Council’s January meeting. An agenda item for January will be that everyone be prepared to provide items to be included in the report that they’d like to see communicated to the Legislature.
Mike will draft a letter to Legislative Leaders Rants and Iverson requesting funds be made available to Senator McKibben and Representative Van Fossen so they can participant in national SSTP meetings.
Future Meetings – January 21, 2004, will be our next meeting. Scheduled for 4 hours (lunch on IDR). The decision will be made in January whether to have a February meeting or wait until after the next national SSTP meeting in March. Also, discussed the possibility of different days or times of the meetings. Just keep this in mind.
Kristi started the review of the Agreement at Sourcing and we ended on Bad Debts Section (Section 320).
Kristi adjourned the meeting.