BILL NUMBER: SJR 1 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Ducheny
JANUARY 27, 2009
Relative to the Sales Tax Fairness and Simplification Act.
LEGISLATIVE COUNSEL'S DIGEST
SJR 1, as introduced, Ducheny. Sales Tax Fairness and
Simplification Act.
This measure would urge members of the California congressional
delegation to join as cosponsors of the federal Sales Tax Fairness
and Simplification Act, or similar legislation, and for the Congress
of the United States to pass the legislation and the President to
sign that legislation.
Fiscal committee: no.
WHEREAS, United States Supreme Court decisions (National Bellas
Hess v. Department of Revenue (1967) 386 U.S. 753 and Quill Corp. v.
N.D. (1992) 504 U.S. 298) have interpreted the Commerce Clause of the
United States Constitution to deny states the authority to require
the collection of use taxes by out-of-state sellers that have no
physical presence in the taxing state; and
WHEREAS, The failure to collect use taxes on remote sales through
traditional carriers and the erosion of sales and use tax due to
electronic commerce threatens the future viability of the sales and
use tax as a stable revenue source for state and local governments;
and
WHEREAS, The Center for Business and Economic Research at the
University of Tennessee has estimated that states could lose as much
as $33 billion in 2008 because they were not able to collect taxes on
remote sales, including sales on the Internet; and
WHEREAS, The same study estimated that California may have lost as
much as $4 billion in 2008 because of the failure to require remote
sellers to collect our state's use taxes; and
WHEREAS, Since 1999, state legislators, governors, local elected
officials, state tax administrators, and representatives of the
private sector have worked to develop a streamlined sales and use tax
system for the 21st century; and
WHEREAS, Between 2001 and 2002, 40 states enacted legislation
expressing the intent to simplify the states' sales and use tax
collection systems, and to participate in multistate discussions to
finalize, and ratify, an interstate agreement to streamline payment
and collection of the states' sales and use taxes; and
WHEREAS, On November 12, 2002, delegates from these 40 states
unanimously ratified the Streamlined Sales and Use Tax Agreement,
which substantially simplifies state and local sales and use tax
systems, addresses the burdens to interstate commerce that were of
concern to the United States Supreme Court, and protects state
sovereignty; and
WHEREAS, The Streamlined Sales and Use Tax Agreement provides
states with a blueprint to create a simplified and more uniform sales
and use tax system, and provides justification for Congress to enact
legislation to allow states to require remote sellers to collect the
states' use tax; and
WHEREAS, California enacted legislation, SB 157 in 2003,
expressing the intent of the Legislature to bring this state's sales
and use tax statutes into compliance with the Streamlined Sales and
Use Tax Agreement; and
WHEREAS, By January 1, 2008, 22 states: Arkansas, Indiana, Iowa,
Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey,
North Carolina, North Dakota, Ohio, Oklahoma, South Dakota,
Tennessee, Texas, Utah, Vermont, Washington, West Virginia, and
Wyoming, representing over 35 percent of the total population of the
United States, enacted legislation to bring their state's sales and
use tax statutes into compliance with the agreement; and
WHEREAS, The California State Legislature and our colleagues in
other states have shown the resolve to acknowledge the complexities
of the current sales and use tax system, have worked with the
business community to formulate a truly simplified and streamlined
collection system, and have shown the political will to enact the
necessary changes to make the streamlined collection system the law;
and
WHEREAS, In the 110th Congress, the Sales Tax Fairness and
Simplification Act (S.34 by U.S. Senators Enzi, Inouye, Leahy, et
al.; H.R. 3396 by Congress persons Delahunt, LaHood, Conyers, et al.)
was introduced to grant those states that complied with the
Streamlined Sales and Use Tax Agreement the authority to require
out-of-state sellers, regardless of nexus, to collect those states'
use taxes on remote sales; and
WHEREAS, Until Congress and the President enact the Sales Tax
Fairness and Simplification Act or similar legislation, participation
by remote sellers not engaged in business in a state is only
voluntary and thus states are unlikely to close the revenue gap
between what is owed on remote transactions and what is collected;
and
WHEREAS, Members of the United States Congress have termed this
federal legislation as "fiscal relief for the states that does not
cost the federal government a single cent" and ensures the viability
of the sales and use tax as a state revenue source; now, therefore,
be it
Resolved by the Senate and the Assembly of the State of
California, jointly, That the California State Legislature calls upon
the members of our congressional delegation to join as cosponsors of
the Sales Tax Fairness and Simplification Act or similar legislation
and to support its swift adoption by the Congress of the United
States, or take other appropriate legislative action to allow states
to collect use taxes on products sold over the Internet; and be it
further
Resolved, That the California State Legislature urges the
President to sign into law the Sales Tax Fairness and Simplification
Act or other legislation allowing for the collection of use taxes on
products sold over the Internet, upon its passage by the Congress;
and be it further
Resolved, That the Secretary of the Senate transmit copies of this
resolution to the President and Vice President of the United States,
to the President pro Tempore of the United States Senate, to the
Speaker of the House of Representatives, to each Senator and
Representative from California in the Congress of the United States,
and to the author for appropriate distribution.