Streamlined Sales Tax Advisory Council

October 15, 2007, Meeting Minutes

Hoover State Office Building

Present: Mark Schuling, Dave Casey, Jim Henter, Jay Turner, and Steve Roberts. Representative Christopher Rants, Kristi Magill, and Ross Larson joined the meeting via conference call. Jim Miller from the Attorney General's Office and Jeff Aten, Darwin Clupper and Larry Paxton from the Department were in attendance.

I. Welcome, Introductions & Opening Comments

Mark Schuling opened the meeting at 10:05 a.m. by welcoming everyone.

II. National Meetings in Kansas City , KS (Sept. 18-20, 2007)

A. BAC – Kristi reported there were multiple meetings throughout the week for the Business Advisory Council trying to develop alternative proposals for the sourcing issue. The BAC came up with an approach with two rates per state; a delivery rate and an over-the-counter rate. The type of transaction would dictate which rate to charge.

Some states felt this wouldn't resolve their problem and it could cause a rate increase in some cases.

Meanwhile, the task force continues to meet frequently.

IDR takes the position that the project needs to move forward and hopes are that if the task force can come up with a resolution; Iowa would support it. Other states don't feel that way. They are taking the hard-line approach that if they had to go through it; then other states should have to go through it. The BAC approach is an option for other states that can't get past the sourcing issue. Representative Rants doesn't see the Iowa legislature opening up this issue. He's okay with the BAC's proposal in order to move forward. The task force continues to review proposals. It was noted that it was a disappointment that Ohio hasn't been participating in these meetings.

Digital Goods issue was resolved in Kansas City. This was a major issue that had been discussed for a long period of time.

B. SLAC/Governing Board

The Governing Board ended up by deferring the sourcing issue.

The Governing Board accepted Arkansas and Wyoming as new full members, effective January 1, 2008. Washington will be the 18th state as a full member, effective July 1, 2008. The Governing Board deferred action on Nevada's petition for membership until December and Tennessee was accepted as an Associate Member State.

Utah and Ohio still have destination sourcing issues.

States will need to annually update the certificate of compliance. The 2007 Annual Report is out on the Streamlined Web site.

Changes to delivery charges – Michigan submitted a proposal to toggle on or off. This was approved, but will not have any impact for Iowa.

Digital Goods – Listed definitions was a major item. Finally through!

III. Direct Mail

The Governing Board never got to this issue in Kansas City. Progress has been made in the meantime. The BAC disagrees with several key issues in the SLAC road map. The BAC approved its own version of a road map to address direct mail issues. Utah, West Virginia and Wyoming sponsored direct mail delivery charge amendments.

IV. Digital Goods

The Governing Board approved definitions of certain specified digital products. This was a major accomplishment.

Dave added that Iowa currently does not tax these items; the Department may make a proposal to the Legislature to tax as separate imposition for these digital products.

V. Update on Legislation & Rules

At this point, it appears there isn't a need for 2008 legislation. Darwin is drafting rules and Dave will be reviewing.

VI. Update on Registration & Revenue Tracking

Larry Paxton provided an update. There are 1,050 sellers registered. Of those, 100 are model 1's; 57 are model 2's of which 30 have signed up with a provider. Those signed up without a provider will be checked for accuracy. The remaining 900 are model 4's. IDR is checking list of top 500 retailers for companies that should be registered under Streamlined.

The amount collected in FY 2007 was $9,099,000. The Department is projecting $12 million in FY 2008.

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

The paper the Council put together is still valid. Kristi indicated we'll see what happens in December with the Governing Board, then the Council will readdress.

Representative Rants agreed with Kristi and noted the Council needs to educate the Legislature and get them prepared for this legislation in 2009.

We will continue to put this item on the agenda so we don't lose sight of it. Jim Henter expressed concern about the time this could take. It was delayed until after the Kansas City meeting and now it's delayed again until the December meeting. He mentioned it goes back to 2004 regarding destination basis compensating retailers who have already spent their money. It will be kept as a top priority on the future agendas. If nothing happens at the December meeting, then the Council will try to figure out how to proceed.

VIII. Future Streamlined Sales Tax National Meetings.

A. Dallas, TX (December 10-12, 2007)

Registration information for the Dallas meeting is now available. Registration fees are $365 for SLAC/GB and $75 for BAC.

Following is a breakdown of meetings:

  • Monday AM – Sourcing Taskforce
  • Monday PM – SLAC with the main topic being sourcing
  • Tuesday AM – BAC/SLAC
  • Tuesday PM & Wednesday – Governing Board

Meeting information should be on the national Streamlined Web site. Dave Casey will forward the information he has to Representative Rants and Steve Roberts.

B. No Dates Set for 2008

IX. Set Next Advisory Council Meeting

Diane will poll the Council regarding availability for a December 17th meeting.

There's a possibly of only meeting three times per year.

X. Adjournment

Meeting was adjourned at 11:05 AM.