Gov. Patton urges completion of ‘Tax Agreement’

For Immediate Release
Sept. 12, 2002
Contact: Terry Sebastian or Rusty Cheuvront: 502-564-2611 -- http://www.nga.org/

Gov. Patton urges completion of ‘Tax Agreement’

FRANKFORT, KY. - In a meeting in Philadelphia today with delegates of the Streamlined Sales Tax Implementing States, National Governors Association (NGA) Chairman Gov. Paul Patton staunchly reaffirmed the NGA’s commitment to the Streamlined Sales Tax Project.

Patton urged the Implementing States to move forward to complete the language of the interstate agreement so that states can enact conforming language and create a uniform proposal to put before Congress.

“We clearly recognize that states need a new, simplified sales tax system for the economy of the 21^st Century in order to capture lost revenues and level the playing field between Main Street businesses and the Internet and mail order sales,” Patton said. “While much progress has been made since this group first convened last November, we now need to accelerate the process and resolve the outstanding issues in order to present a package for the states to consider in their next legislative sessions.

“There is too much potential lost revenue at stake for us to drag our feet on this matter.”

Significant revenue has been lost due to remote sales, including those made over the Internet, causing alarm in state capitols across the country, Patton said. One report estimates that states stand to lose more than $45 billion in sales tax revenue by 2006.

“Most consumers buying products remotely are unaware that they are obligated to pay sales and use taxes on goods purchased, or used, in the state,” Patton said. “In addition, there is no convenient method for paying these taxes and most states lack the resources to collect taxes on remote sales; therefore, compliance has traditionally been low and as more remote sales take place, the gap between what is owed and what is collected continues to widen -- resulting in major economic losses for the states.”

The NGA has urged Congress to use its authority to regulate interstate commerce and enact legislation giving the states the authority to implement the streamlined and simplified system that would enable remote sellers to collect and remit sales and uses taxes with little or no burden. The agreement being developed by the Implementing States will serve as the model for states to follow within their own borders and present as a unified proposal to Congress.

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