R E S O L U T I O N

R______________00

title

RESOLUTION PERTAINING TO RETAIL SALES TAXES ON INTERNET SALES

body

WHEREAS, the use of new communications technologies, including the Internet, as a way to conduct sales of goods and services is accelerating; and

WHEREAS, out-of-state vendors who conduct sales via the Internet, mail order, and phone, under many circumstances, are not required by law to collect existing sales and use taxes imposed by state and local governments in which the purchaser resides; and

WHEREAS, the primary barrier to collecting taxes on remote sales is the Supreme Court's ruling in Quill v. North Dakota which defers to Congress, and only Congress, to authorize states to require remote vendors to collect taxes in a manner that does not unduly burden interstate commerce; and

WHEREAS, current laws create a competitive disadvantage and great inequities between merchants who sell from traditional "Brick- and-mortar" establishments and those who sell from electronic stores; and

WHEREAS, this migration of sales to the Internet is restricting the ability of state and local governments and school districts to collect taxes which finance essential public services including but not limited to police, fire, emergency medical service, education, social services, infrastructure development, and local healthcare; and

WHEREAS, the United States Constitution reserves for the states the right to collect and impose taxes; and

WHEREAS, 45 states and the District of Columbia collect over 40 percent of overall revenue from sales taxes to fund vital public services; and

WHEREAS, a recent University of Tennessee study estimates that state sales tax revenue losses in 2003 will exceed $10 billion; and

WHEREAS, the Advisory Commission on Electronic Commerce, established by the Internet Tax Freedom Act, failed to address, in a fair and equitable manner, the growing volume of tax-free sales transactions occurring over the Internet, which have put "brick-and-mortar" stories at a competitive disadvantage; and

WHEREAS, the Commission's report to Congress does not effectively address the tax losses state and local governments will experience if the Internet becomes a permanently tax-free retail market.

THEREFORE BE IT RESOLVED that the Village of Lombard opposes any congressional action to implement the Advisory Commission on Electronic Commerce's report proposals that would preempt state and local sovereignty, guaranteed by the 10th Amendment of the United States Constitution; and

BE IT FURTHER RESOLVED that the Village of Lombard supports simplification of state and local sales taxes, and urges states to move expeditiously to craft and approve model legislation; and

BE IT FURTHER RESOLVED that the Village of Lombard opposes any congressional efforts to expand the current moratorium to cover state and local sales and use taxes; and

BE IT FURTHER RESOLVED that if state and local governments choose to negotiate a brief extension of the existing moratorium as part of a broader bill, such an extension:

* Should only be effective for a short period of time (no more than two years); and

* Must be linked to states' successfully implementing sales tax simplification, which would trigger congressional authorization of expanded duty to collect use taxes on remote sales.

Adopted this _____ day of                                          , 2000

Ayes:                     

Nays:                     

Absent:                     

Approved this _____ day of                      , 2000

                     ____________________________________________

                     William J. Mueller

                     Village President

ATTEST:

___________________________________

Lorraine G. Gerhardt

Village Clerk

APPROVAL AS TO FORM:

___________________________________

Thomas P. Bayer

Village Attorney

RESOLUTION R_________________00