“Nexus in the New Economy: Ensuring a Level Playing Field for All Commerce”
The Streamlined Sales Tax Project (SSTP) and business activity tax nexus were the topics addressed by a task force of the of National Conference of State Legislatures (NCSL) Executive Committee Task Force on State and Local Taxation of Telecommunications and Electronic Commerce National Conference of State Legislatures at the NCSL’s July 21, 2003 annual meeting in San Francisco.
The Task Force passed a resolution reaffirming its position that there is no natural linkage between Business Activity Taxes and possible linkage in federal legislation of the issue of collection authority with the issue of nexus standards for business activity taxes was discussed. Business activity taxes include any tax imposed on or measured by net income, gross receipts or gross profits, business license taxes, business and occupation taxes, and similar taxes and fees imposed on businesses for the right to conduct business within a state or measured by business activity.
The Task Force also updated a prior policy statement, “Nexus in the New Economy: Ensuring a Level Playing Field for All Commerce,” to include the following statements:
- States will lose $45.2 billion per year by 2006 in sales tax revenue due to the emergence and growth of electronic commerce, according to the Center for Business and Economic Research at the University of Tennessee.
- The NCSL would support federal legislation to grant states collection authority that allows a small-business exception for sellers that have less than $5 million in taxable remote sales, provides reasonable and adequate compensation to sellers for the cost of collection, allows review of the actions of the Governing Board of the Streamlined Sales and Use Tax Agreement by the United States Court of Federal Claims, and ensures that any filings by sellers in the course of registering, calculating, collecting, or remitting sales and use taxes collected cannot be used as a criteria for determining nexus for any other tax responsibilities, including state business activity taxes.
- The NCSL would oppose any federally mandated single sales and use tax rate per state for remote commerce.