Streamlined Sales Tax Advisory Council

July 31, 2008, Meeting Minutes

Hoover State Office Building

Present: Mark Schuling, Kristi Magill, Dave Casey, Marc Michaelsen, Ann Stocker, and Ed Wallace. Joining the meeting via telephone were Dave Krutzfeldt and Jerry Fleagle. Representatives from the Department were Victoria Daniels, Jeff Aten, and Larry Paxton.

I. Welcome & Opening Comments.

Mark Schuling called the meeting to order at 10:05 a.m. Introductions were made. Mark welcomed Victoria Daniels, supervisor of the Department's Policy Section, to her first Advisory Council meeting. She will be taking on more responsibility in the streamlined sales tax area for the Department.

II. National Meetings in Washington, DC (March) & Chicago, IL (June).


Kristi Magill reported that the DC meeting was an aggressive campaign for national attention. Dave Casey also stated that the primary focus was to allow participants to contact Congressional delegates which will result in more signatories on federal legislation. The feedback was good. Both Kristi and Dave noted that the DC area will be a meeting site again, since it's an election year in 2008 and it will be necessary to reeducate Congress on Streamlined issues.

Workgroups were formed on “Sales Price” (the definition) and “Maintenance Contracts.”

Direct mail issues for printers were discussed at both meetings. Issues are not only for printers but anyone using printers.

Kristi reported that the process was started by the Governing Board to sanction New Jersey at the Chicago meeting for being out of compliance with the SSTUA regarding telecommunications. The business industry also believes they are out of compliance regarding the fur tax issue.

B. SLAC/Governing Board

The Governing Board formed a Task Force on the issues involving the small seller exception and vendor compensation based on feedback from the March meeting. Harley Duncan, now with KPMG, will be leading up the “Small Seller and Compensation Task Force.” This Task Force is primarily for the federal legislation.

Casey reported that nothing major came out of March or June meetings.

Two amendments reviewed at the Chicago meeting were SSUTA Amendment Sponsorship (AM08003) and Amendment Notice Requirement (AM08004). SSUTA Amendment Sponsorship would allow the SLAC and BAC to sponsor amendments directly to the Governing Board. Amendment Notice Requirement would reduce the SSUTA amendment notice requirement from 60 days to 30 days. The sponsorship amendment was deferred, while the notice amendment passed.

Dave said New Jersey difficulties are results of telecommunications and fur tax issues. This is the first time the Governing Board has had to deal with sanctioning a state. New Jersey has until January 1, 2009, to get legislation passed for both issues.

The Council discussed an amendment sponsored by Washington concerning the origin sourcing of intrastate direct mail. Washington 's amendment provides an election for origin-based direct mail sourcing only for intrastate sales.

Uniform Tax Returns group (Larry Paxton is on this group). Larry reported that CSP's are having discussions regarding everybody using SER (Simplified Electronic Returns). This would be very expensive for Iowa . An alternative which Iowa supports would be to use a state's electronic filing system. This group is still working on uniform returns.

III. Direct Mail.

A handout was provided regarding Direct Mail Delivery Charges.

Kristi mentioned three major issues:

•  Sourcing

•  Definition of Delivery Charges

•  Sales Price

The Council also discussed an Amendment to the Agreement handout. Kristi indicated that the business industry had changes from what was handed out with regard to the delivery charge definition language. Neither BAC or SLAC have come to terms with language to deal with the sales price delivery charge issue – which is a separate issue.

IV. Governing Board Task Force on Small Seller and Compensation.

The Council was provided with a discussion document handout. It was a rough outline resulting from the Task Force's first meeting. The Task Force is in the information gathering stage right now. Representative Rants and Kristi are members of the Task Force. Larry Paxton has been listening in on these teleconferences.

V. Update on Legislation & Rules.

Dave provided an update on membership states. Washington is a full member and that brings the total full-member states to 19. Ohio, Tennessee, and Utah are associate member states. Tennessee's legislation is effective in 2009. Ohio and Utah are very close to full membership with the origin-based sourcing amendment. Wisconsin has legislative issues. Virginia and Texas are in the talking stages. Illinois has origin-based sourcing issues.

Dave indicated that no amendments to the Agreement have been passed this year (2008) that would require Iowa to make legislative changes. After the Charleston meeting we will know if a Streamlined bill will be necessary.

Not much progress has been made in the Department's Streamlined Sales Tax rules. Victoria will be working on a rules project that will include streamlined rules.

VI. Update on Registration & Revenue Tracking.

A new CSP (Certified Service Provider) is coming on board July 1, 2008.

Dave reported that the Department was required to recertify to show that we're still in compliance with the Agreement. The Department has completed a certificate of compliance and a new taxability matrix.

VII. 2008 Annual Report to the Legislature.

The Annual Report to the Legislature is due in February 2009. Council members were asked to be thinking about what to include in this year's report as it will be discussed at the next Advisory Council meeting. It was noted to include the vendor compensation to spur discussion.

VIII. Future Streamlined Sales Tax National Meetings:

Annual Meeting in Charleston , WV – September 3-5, 2008

BAC & SLAC are scheduled for Wednesday morning. SLAC continues through Wednesday afternoon.

BAC & SLAC are scheduled for Thursday morning.

Governing Board scheduled for Thursday with a 1:00 p.m. start at the State Capitol followed by a reception/dinner that evening at the Governor's mansion.

Governing Board is scheduled Friday until noon.

The Governing Board is considering only meeting twice (spring and fall) next year. Victoria will be attending more meetings to start transitioning for Dave.

IX. Set Next Advisory Council Meeting.

We'll wait until after the Charleston meeting and probably schedule something around the end of September or first of October with the Council. Diane will send an e-mail.

X. Adjournment.

Mark adjourned the meeting at 11:40 a.m.