Streamlined Sales Tax Advisory Council

November 1, 2005, Meeting Minutes

Hoover State Office Building

I. Opening Comments

Co-Chair Mike Ralston began the meeting by introducing Speaker Christopher Rants to the Advisory Council. Representative Sands will no longer serve on the Governing Board; Speaker Rants will be taking his place. Speaker Rants has been involved with COST and the NCSL Task Force at the national level. On behalf of the Advisory Council, Mike thanked the Speaker for his leadership and support.

Don Cooper introduced Larry Paxton, the department’s new employee whose primary duties will be related to the Streamlined Sales Tax Project. Don also noted the number of Revenue employees at the meeting and identified everyone’s involvement in the project.

II. Update from National Meetings

Business Advisory Council to the Governing Board – Co-Chair Kristi Magill is on the Business Advisory Council (BAC) Governing Board. Steve Woods (NFIB) is representing small business interests. Kristi will be representing medium-sized businesses. Large-sized businesses are well represented on the BAC. The Articles of Incorporation have been filed. The bi-laws are being drafted and will be addressed at the Tampa meeting. The bi-laws will address seats reserved for all sizes of businesses. Executive Committee and Board of Directors will also be determined at that meeting.

Certified Service Providers (CSPs) - There are four companies interested in becoming certified service providers. They are Taxware, Exactor, Avalara, and EDS.

The Council engaged in a lengthy discussion on CSPs, certified software, and amnesty.

The issue with amnesty is when does it begin? The Business side has issues with amnesty with respect to the fact there are currently no CSPs. If amnesty starts 60 days after the 1st day of registration; then businesses should wait for certification of a CSP to register. Some states have statute issues. We may need to clarify or change our statute.

The Council engaged in the discussion of CSP compensation – Iowa’s position is new money is new money and new registrations should be compensated. But there are issues with nexus vs. non-nexus.

CSPs compensation methodologies are still being discussed. There are still a lot of unanswered questions on CSPs. Also, there’s the issue of SSTP states vs. non-SSTP states.

With all these issues and no answers, it was determined that our Advisory Council needs to contact committees at the national level regarding CSP issues expressing an extreme urgency to get these issues resolved. By consensus, the Advisory Council has authorized the Co-Chairs to draft a strong letter expressing the Council’s position.

III. Update on Registrations Since 10/1/05 Implementation

The Centralized Registration System went live on October 1, 2005. It received 200 registrations. The system suffered a robot attack with bogus registrations. Larry Paxton is verifying the Iowa registrations. The department has moved the Streamlined registration away from eFile & Pay on the Web site to eliminate any confusion. Larry handed out Web site information and also indicated we would be updating our Web site to reflect some national expectations.

VI. Governing Board Committee Membership (handout)

Don gave a little history of SSTP starting with Implementing States, then to Conforming States, evolving into the Governing Board with 4 representatives from Iowa with 1 vote; it’s now officially Streamlined Sales Tax Governing Board, Inc.

Streamlined Sales Tax Governing Board, Inc. has an Executive Committee, bi-laws and Administrative Rules approved. The Executive Committee consists of 9 members: 5 directors; President, 1st Vice Pres., 2nd Vice Pres., and Secy/Treas. Don handed out the list of committees, members and states they represent. One correction to the handout was that a 2nd vice chair of the State and Local Advisory Group hasn’t been appointed.

The Streamlined Sales Tax Agreement was effective and implemented October 1, 2005. There are 13 full member states and 6 associate member states (associate states are lacking legislation or are not yet completely in compliance with the Agreement). Amendments to the Agreement passed October 1, 2005, may result in possible legislation. We anticipate having legislation every year to keep up with amendments to the Agreement and keep Iowa in conformance with the Agreement.

V. SSTP Legislative Revisions 2006 General Session

Dave Casey provided the Council with a summary of possible legislation based on changes to the Agreement dated April 16, 2005. Darwin Clupper with be drafting the legislation which will be strictly a Streamlined Sales Tax bill. Once drafted, he will distribute to the Advisory Council for comments before going over to the Legislature.

Kristi reiterated that every year there will be possible legislation to stay in conformance with the Agreement.

VI. Update of Administrative Rules

Dave reminded everyone that the department has already filed two sets of Administrative Rules. The third set will be published in the October 12, 2005, Administrative Bulletin. Once the fourth set is completed, the department will send to the Advisory Council for an opportunity to comment.

VI. Roll of the Council in the Future

Even with the implementation effective October 1, 2005, Mike and Kristi both believe there’s still a lot of work for this Advisory Council in the future. They will continue to utilize the Council to help the department with issues that arise. The Council will continue to meet on an as needed basis as it always has.

The Council will need to find a replacement for large business since Marc Michaelson has left Meredith Corporation. Mike, Kristi and Stacey will be discussing a possible replacement.

National SSTP Meetings are coming up on November 8 & 9 in Tampa for State and Local Council. BAC will meet on November 7. Governing Board will meet on November 9. Larry Paxton and Dave Casey will be attending. Don Cooper will join the Governing Board meeting via teleconference.

National SSTP has also scheduled a meeting for January in Phoenix.

VIII. Set Next Meeting

It will depend upon what takes place at the national level as to whether the Council will meet before or after the January Phoenix meeting. The Co-chairs will determine when the Council should meet again. In the meantime, the department is tracking revenue received from SSTP registrations. Diane will include Revenue Update as a topic on future agendas.

Mike adjourned the meeting by once again thanking everyone for their leadership.