Streamlined Sales Tax Advisory Council

April 30, 2004, Meeting Minutes

Mike Ralston hosted a teleconference call on Friday, April 30, 2004, at 10:00 A.M.

I. Educational Meetings

Wayne Cooper updated the Advisory Council on the educational presentations being made around the state by the Department’s Taxpayer Service Specialists. Of the 120 presentations scheduled, 28-30 were completed by this date. Attendance in these seminars varied from 1 to 20 people. Sourcing has been the big issue. Kristi Magill confirmed that the only significant questions in the meeting she attended regarded sourcing and noted that advisory council members can look forward to national meeting updates on this issue. Chris Theisen suggested that handouts would be helpful at the meetings. In response, it was agreed that IDR staff will make handouts available and will provide further information on the IDR website. Additional concerns were expressed regarding the tax status of food items. With regard to that and other issues, the IDR will continue to work with members of the council.

The media plan related to the sales and use tax changes is now being implemented. The Department has had press conference coverage, news releases to every county, 500 media contacts, and interviews with radio stations. Further efforts to contact customers with this information will continue. The Department sent a mailing to every registered retailer, as well as to several groups (such as the Retailers Federation, Community Colleges, Grocers Association, etc., to move the information through their publications).

In response to feedback from Dick Koberg regarding Carroll County’s lack of attention to the changes, IDR staff will work proactively with officials there.

II. Food Database

Don Cooper thanked Jerry Fleagle for his work. The Department does have a database and will be updating that database.

Jerry continues to provide the Department with information. The Department hopes to have an updated list by the end of May. Jerry will get a list of follow-up issues. Questionable items will be posted on the Grocers website (may even try to be UPC code specific). Jerry will have the information for the Department in 10 days to 2 weeks. People can check the Grocers Association website at Iowagrocers.com.

Darwin Clupper informed the Advisory Council that the Department’s proposed rule regarding food is on the IDR website at www.state.ia.us/tax.

III. Compliance Transition

The council discussed compliance with the changes and the Department’s view of enforcement. Mike Ralston led a discussion on the part of the Department and made note of Jerry Fleagle’s comment: “Tell us what to collect and we’ll collect it.” Taxpayers generally wish to comply and it is incumbent upon the Department to assist in that effort.

The Department will be flexible with regard to enforcement, especially as it relates to the immediate changeover. The goal is not to be punitive and whether it is 2004 or 2007, a key issue will be the intent of the taxpayer. Good faith efforts to comply will be met with positive responses by the Department. Several IDR Department managers who participated in the teleconference will be a part of examining issues on a case by case basis, and are clear that regarding working with taxpayers, as opposed to rigidly applying penalties, is the Department goal.

To aid in compliance, the department is developing an interactive jurisdiction database. A detailed report on this activity will be a part of the council’s next meeting. Monti Miller advocated a database by zip code as a tool to help everyone comply. Rod Erickson explained that the Department is analyzing that exact option. He noted that there were three types of interactive databases being examined: 1) 5 digit zip, 2) 9 digit zip and 3) full address.

A number of states are looking at a consortium. That idea is not moving too fast and some states have lost interest. IDR is looking at developing its own database with two interested vendors, but the problem is timing as it relates to the RFP process. A decision will be made in advance of the next council meeting.

Finally, regarding compliance transition, Mike indicated that the notes from this discussion would be a part of the information posted on the Department’s website as a record of this teleconference. In addition, these notes will be discussed at the next council meeting and counsel is welcome and desired regarding language.

IV. Other Updates

Legislative Issue – Dave Casey discussed the leasing/new construction exemption issue that developed at the end of the General Assembly. The specific language is in Senate File 2298. Kristi has a one-page summary that Don will e-mail to the Advisory Council. As soon as the Governor signs it, the construction industry will be notified of the exemptions.

RFP – There continues to be a lot of confusion regarding the RFP. This will be a big part of the next national meeting. Don Cooper called Scott Peterson (National Co-Chair) for his input. It is hoped that more guidance will be available following the May meeting.

National Effort – The advisory council continues to monitor what other states and Congress are doing. The council will also continue to monitor the national effort to get 10 states with 20% of the population and implementation dates for other states. It was noted that Ohio is a key state. Ohio delayed implementation once and some sources report that officials there are considering delaying again.

The next meeting of the advisory council will be held June 3. It will start at 10:00 A.M., but a determination will be made at a later date as to whether it will be comprised of a teleconference or a meeting in the building.

Warren Townsend complimented the Council on the work being done in Iowa.

Mike noted that the work of the council is complicated and important and he thanked everyone for their hard work. The call was adjourned.

Agenda Items for June 3: Food Database, Location Database (jurisdiction)

Please contact the Department with additional agenda items.