HomeMy WebLinkAbout1-27-2000-13.17 - Resolution - 01/27/2000RESOLUTION NO. 1-27-2000-13.17
A RESOLUTION OF THE CITY COUNCIL OF COLLEGE STATION, TEXAS, SUPPORTING
THE REASONABLE APPLICATION OF SALES TAX ON APPLICABLE PRODUCTS AND
SERVICES PURCHASED THROUGH ELECTRONIC COMMERCE, TO ENSURE EQUITABLE
TREATMENT OF RETAILERS PHYSICALLY LOCATED IN COLLEGE STATION AND
PRESERVATION OF THE LOCAL TAX BASE NEEDED TO DELIVER BASIC AND
EXPECTED GOVERNMENT SERVICES.
WHEREAS, state and local governments rely on sales tax revenues to pay for public services
related to public safety, education, infrastructure maintenance, social programs and other quality
of life services, and
WHEREAS, nationwide, sales tax comprises nearly half of the tax revenues collected by states
and distributed to local governments, and
WHEREAS, state and local governments have experienced difficulty in collecting sales tax on
purchases made from out-of-state businesses, known as remote sellers, and
WHEREAS, the growth of the Internet has increased the ease with which consumers can engage
in remote sales, and
WHEREAS, between 1997 and 1998 retailers selling on the Internet tripled from 12% to 39%,
and (source: White House, Office of Science and Technology Policy)
WHEREAS, 93.5% of e-commerce transactions are expected to come from traditional business
and retail sources by 2002, and (source: Jupiter Communications)
WHEREAS, the U.S. Congress enacted the Internet Tax Freedom Act of 1998 which pre-empts
state and local authority by establishing a three year moratorium on the imposition of e-
commerce-related taxation, and created an Advisory Commission on Electronic Commerce
charged with making recommendations for future Congressional action, and
WHEREAS, the Internet Tax Freedom Act discriminates against citizens without Internet access
because these individuals will continue to be obligated to pay sales tax on purchases from local
stores, while consumers with the means to afford the necessary technology for making internet
purchases will not be required to pay sales tax, and
WHEREAS, retailers engaging in e-commerce will experience an unfair competitive advantage
over local, "Main Street", or "bricks and mortar" businesses if the Internet Tax Freedom Act is
made permanent, and
WHEREAS, the National Governor's Association estimates that state and local government
revenues from sales tax could decrease by as much as 20% by 2003 if the Internet Tax Freedom
Act is made permanent, and
WHEREAS, the City of College Station is a member of the National League of Cities (NLC),
and the National League of Cities is launching a multi-year education and advocacy effort to
increase understanding of the electronic marketplace and develop public policy
that will help shape the debate at the end of the three-year moratorium on taxing online
transactions, and
WHEREAS, There are three key messages guiding this campaign:
State and local leaders strongly support technology advances and the opportunities
offered by electronic commerce. At the same time, we must protect local retailers
from unfair competition and preserve tax bases needed to deliver basic and expected
government services.
Charging sales tax for online purchases of traditional goods does not represent NEW
taxes. A book purchased off a shelf at Borders Bookstore and a book purchased
online through Amazon.com are and should be subject to the same taxes. If a
consumer buys two books at Amazon.com and no books at the local Borders, the
government has lost expected revenue from the sales tax.
Convenience, not tax avoidance, is what lures consumers to online purchasing. In
fact, many don't know whether they pay any sales tax when they buy online or under
what circumstances they would pay local/state sales tax. Therefore, it is safe to
assume that charging sales tax for traditional purchases will not stymie the growth of
this new marketplace. Moreover, it is absolutely clear that state and local taxes have
in no way restricted the phenomenal growth of the nation's leading e-commerce
companies like Microsoft, Intel, and others. Federal legislation should not create a
protected class of taxpayers at the expense of Main Street and other taxpayers, and
WHEREAS, It is important that Cities make their concerns known to our U.S. Senators and
Congressmen, state legislators, Governor and Lieutenant Governor, and
WHEREAS, Local elected officials have a unique opportunity and duty to educate citizens,
business leaders, and key stakeholders about the risk that the dramatic growth of tax-free online
shopping poses to local revenue bases, and
WHEREAS, the Advisory Commission on Electronic Commerce will consider proposals to
address e-commerce-related taxation issues, including one jointly submitted by the National
Governors' Association, Council of State Governments, National Conference of State
Legislators, National Association of Counties, US Conference of Mayors, National League of
Cities, and International City/County Manager's Association entitled "Streamlined Sales Tax
System for the 21st Century."
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
COLLEGE STATION, TEXAS, that
1. the City of College Station does hereby supports the reasonable application of sales tax on
applicable products and services purchased through electronic commerce, to ensure equitable
treatment of retailers physically located in College Station and preservation of the local tax
base needed to deliver basic and expected government services
2. the City of College Station hereby opposes attempts by the United States Congress to enact
further legislation that might pre-empt the authority of state and local governments, and
3. the City will participate in educational and advocacy efforts as outlined by the National
League of Cities and will communicate with national, state and local officials regarding this
important issue.
PASSED AND APPROVED this 27th day of January, 2000 at a regular meeting of the City
Council of the City of College Station, Texas.
APPROVED:
ATTEST:
Lynn'l~lcllhaney, Mayor
Connie Hooks, City Secretary
APPROVED AS TO FORM:
Harvey- Cargo' '1, Clty-'V' Attorney