by Esther van Mourik
Legislative attorneys usually work quietly in their offices, researching legal issues, drafting bills and amendments, reviewing rules, and annotating cases. Occasionally, we get an opportunity to meet with colleagues and legislators from across the country to delve deeply into legal issues or topics that significantly affect all states. This week, I want to share with you some of the work I’ve had the opportunity to participate in for the last two years.
In 1999 the Executive Committee of the National Conference of State Legislatures (NCSL) established the Executive Committee Task Force on State and Local Taxation of Communications and Electronic Commerce to review and make recommendations to the states on simplifying the administration and collection of sales and use taxes on out-of-state transactions, particularly as they relate to telecommunications. The Task Force’s scope was expanded in 2001 to review corporate income tax law and now includes consideration of other multistate tax issues of interest to states. It is now known simply as the Executive Committee Task Force on State and Local Taxation, or SALT. The following former Colorado legislators have served on the Task Force:
- 2004-2006 – Senator David Owen (R)
- 2005-2008 – Representative Michael Garcia (D)
- 2007-2009 – Representative Don Marostica (R)
- 2010-2014 – Representative Amy Stephens (R)
- 2012-2014 – Senator Ellen Roberts (R)
In 2013, NCSL invited me to attend the Task Force meetings as a legislative staff member. Including me, there are currently three legislative staff members who serve on the committee, along with 35 legislative members from states around the nation. To preserve our nonpartisan role, legislative staff members do not vote on the policy issues or resolutions that the Task Force takes positions on.
One of the Task Force’s main missions is to see that Congress enacts legislation regarding the remote collection of sales tax. For a short primer on that issue, read this past LegiSource article.
The Task Force most recently met in Chicago, Illinois on Sunday, August 7, and Monday, August 8, before the start of the 2016 NCSL Legislative Summit. At that meeting we studied:
- General state tax trends;
- What other states could learn from tax developments in California;
- Taxation of marijuana in Colorado and Washington;
- Lost tax revenue due to “skimming;”
- The “normal tax base” as it relates to tax expenditure reports and budgets;
- State tax accounting methods;
- The impact of state tax changes on the financial reporting of publicly traded companies; and
- Emerging issues in property taxation in 2017.
NCSL staff also updated the Task Force on the status of remote sales tax collection legislation in Congress and in the states. Certain power point presentations and handouts from the Chicago meeting are available here.
The Task Force heard from Helen Hecht, general counsel for the Multistate Tax Commission, about changes in the federal tax treatment of partnerships and the need for conforming state legislation. In general, the IRS determined that new federal rules were necessary to review partnerships, including new audits at the partnership level. Because Colorado piggy-backs off the federal income tax system, if federal tax adjustments are made at the partnership level there may need to be conforming legislation in Colorado’s tax law to account for those federal adjustments on the Colorado tax return. The link to power point presentations, above, includes a presentation on this issue if you would like more information.
In one of the most thought-provoking presentations of this meeting, author and Deputy Publisher of Tax Analysts David Brunori led the Task Force in a rousing (really!) discussion about tax policy considerations for legislators. He started the conversation by saying that he would present his opinions in a way that would likely mean he would not be invited back for another meeting any time soon. Please read this article by Mr. Brunori from September 30, 2015, which lays out the advice he shared at the meeting. For legislators serving on the House and Senate Finance committees, there’s some interesting material there.
Finally, the Task Force amended and readopted the NCSL resolution regarding the enactment of the Remote Transactions Parity Act and readopted the NCSL resolution regarding passage of the Federal Digital Goods & Services Tax Fairness Act. Current copies of both resolutions can be found here. The resolutions were adopted by the full NCSL at the annual business meeting.
The next meeting of the SALT Task Force is scheduled for November 18-19 to continue our work in studying taxation issues affecting the states.