Streamlined Sales Tax Advisory Council

April 25, 2005, Meeting Minutes

I. Opening Comments –

Co-chair Mike Ralston opened the meeting by introducing Lynn Freehill. Lynn was attending a public meeting as a requirement for Drake University.

II. Update from Washington, DC Meeting –

In light of all the tension leading up to this meeting, Co-chair Kristi Magill was amazed at how well the meeting actually went. Of the 16 amendments, 10 were important to Business in exchange for granting the associate membership.

Thirty-four states were represented at the meeting. Everything Business wanted passed and the Associate Membership passed. Some of the amendments became moot after the Associate Membership was passed. Other amendments were lumped together. The Council discussed the changes to the amendments and the voting results. Final wording on the adopted amendments will be e-mailed to the Advisory Council and the Department will post them on the Web site.

Associate Members will not be allowed to vote on amendments to the Agreement or interpretation of the Agreement.

It will be known by next Monday if the 10 states, 20% rule can be reached, because petitions for membership are due May 1, 2005. If the thresholds are met and the vote is positive on July 1, the Governing Board can be established. Mike mentioned a lot of work was done leading up to the D.C. meeting and he thanked everyone for making it a successful meeting.

Rod discussed with the Advisory Council rates and boundaries, centralized registration, Certified Service Provider s (CSP) and costs associated with CSP’s. Smaller groups dealing with these issues have been formed to bring papers before the Governing Board.

David Casey brought up the issue of a low dollar threshold, i.e., small business exemptions. Federal legislation doesn’t have anything in the bill regarding small business exemptions. Amazon and eBay are on different sides of this issue. This Advisory Council could make recommendations at the federal level. Another question brought up was: What’s the criterion for determining what’s a small business? The Advisory Council thought we should keep this on the table for federal legislation. Telecommunications and small businesses are the issues holding up federal legislation.

Representatives from the Department attended a meeting in Atlanta, GA, in April. Evaluating CSP’s and technical issues were discussed at this meeting. Jeff Aten reported that his CSP Committee feels they are on track. CSP Committee introduced a self-assessment questionnaire. It is a goal to have CSP’s up and running by October 1, 2005.

Twenty (20) states from Conforming States and 6 or 7 CSP’s attended. Committee assignments in certification, system controls, security, conformance with SST Agreement, etc. were made. Weekly teleconferences are being held. Rod highlighted that Iowa has lots of work to do, but we’re quite a bit ahead of some states.

Rod had discussed the rates and boundary database with Kansas since they went with the same company as Iowa did for data. It took Kansas about 1 year to get the data straightened out and they don’t plan on 100% accuracy since addresses are just too fluid. Retailers are safe from the Department coming back on them if they’ve used our incorrect information.

Rod mentioned outstanding issues such as: CSP’s filing consumers use tax and requirements to collect if multiple locations. Rod will be proactive.

Kristi wanted Rod’s opinion on Washington’s database. Rod thought their proposal will cause a hardship on streamlined users. Small companies wouldn’t be able to download because it’s too huge.

Rod discussed another issue. Would CSP be responsible for penalty and interest on any late transactions? CSP’s say they’d never be late. Some states bill penalty and interest on the backend. Iowa allows retailers to figure their own penalty and interest.

Iowa is a test state for the traditional registration system, but things keep getting pushed back. The test date is May. It will go live in June.

III. Status of Legislation –

David Casey handed out and discussed a section by section explanation of Senate File 314. Dave and Don met with medical lobbyists for some clarification. There’s a House Ways and Means meeting at 1:15 today for anyone who wants to attend. Senate should take it up today or tomorrow.

IV. Update of Rules –

Second set of rules was delayed because the certificate of compliance indicated we would take care of some conformance issues in the Administrative Rules process. The Department filed those rules last week. They should be completed by July 1.

The Department is back to work on the second and third sets. The second set was held up because of machinery and equipment rule. Dave will circulate through Advisory Council when ready.

V. Set Next Meeting –

Mike and Kristi will determine when to hold the next meeting. They’re thinking July or August. In the meantime, the department will continue to e-mail communications to the Advisory Council regarding states petitioning for membership, results of the June 30th – July 1st Chicago meeting (who are full members and who are associate members).

VI. Adjournment –

Mike thanked everyone and the meeting was adjourned.