HomeMy WebLinkAboutResolution No. 2000-03 � t .... . ._n... • e .
RESOLUTION NO.R2000-03
A RESOLUTION OF THE CITY OF FRIENDSWOOD,TEXAS,SUPPORTING THE RFASONABLE
APPLICATION OF SALES TAX ON APPLICABLE PRODUCTS AND SERVICES PURCHASED
THROUGH ELECTRONIC COMMERCE,TO ENSURE EQUITABLE TREATMENT OF RETAILERS
PHYSICALLY LOCATED IN FRIENDSWOOD AND PRESERVATION OF THE LOCAL TAX BASE
NEEDED TO DELNER BASIC AND EXPECTED GOVERNMENT SERVICES.
WHEREAS,state and local governments rely on sales tax revenues to pay for public services
related to public safety,education,infrastructure maintenance,social programs and other quality of
life services,and
WHEREAS,nationwide,sales tau comprises nearly half of the tax revenues collected by states and
distributed to local governments,and
WHEREAS,state and local governments have experienced di�cutty in collecting sales tax on
purchases made from out-of-state businesses, known as remote sellers,and
WHEREAS,the growth of the Internet has increased the ease with which consumers can engage in
remote sales,and
WHEREAS, between 1997 and 1998 retailers selling on the Internet tripled from 12%to 39%,and
WHEREAS,93.5%of e-commerce transactions are expected to come from traditionai business and
retail sources by 2002,and
WHEREAS,the U.S.Congress enacted the Internet Tax Freedom Act of 1998 which pre-empts state
and local authority by establishing a three year moratorium on the imposition of e-commerce-
related taxation,and created an Advisory Commission on Electronic Commerce charged with
making recommendations for future Congressional action,and
WHEREAS,the Internet Tax Freedom Act discriminates against citizens without Internet access
because these individuals will continue to be obligated to pay sales ta�c on purchases from local
stores,while consumers with the means to afford the necessary technology for making internet
purchases will not be required to pay sales tax,and
WHEREAS, retailers engaging in e-commerce will experience an unfair competitive advantage over
local,"Main Street",or"bricks and mortar" businesses if the Internet Tax Freedom A�ct is made
permanent,and
WHERFAS,the National Governor's Association estimates that state and local government
revenues from sales tax could decrease by as much as 20%by 2003 if the Intemet Tax Freedom Act
is made permanent,and
WHEREAS,the City of Friendswood is a member of the National League of Cities(NLC),and the
National League of Cities is launching a multi-year education and advocacy effort to increase
understanding of the electronic maMcetplace and develop public policy recommendations that will
help shape the debate at the end of the three-year moratorium on taxing online transactions,and
WHEREAS,There are three key messages guiding this campaign:
. State and local leaders strongly support technology advances and the opportunities
offered by electronic commerce. At the same time,we must protect local retailers from
unfair competition and preserve tax bases needed to deliver basic and expected
government services.
. Charqinq sales tax for online purchases of traditional goods does not represent NEVN
taxes. A book purchased off a shelf at a local bookstore and a book purchased online
through Amazon.com are and should be subject to the same taxes. If a consumer buys
two books at Amazon.com and no books at the local bookstore,the government has lost
expected revenue from the sales tax.
. Convenience, not ta�c avoidance,is what lures consume�s to oniine purchasing. In fact,
many don't know whether they pay any sales tax when they buy online or under what
circumstances they wpuld pay local/state sales tax. Therefore,it is safe to assume that
charging sales tax for traditional purchases will not stymie the growth of this new
marketplace. Moreover,it is absolutely clear that state and local taxes have in no way
restricted the phenomenal growth of the nation's leading e-commerce companies like
Micrasoft,Intel,and others. Federal legislation should not create a protected class of
taxpayers at the expense of Main Street and other taxpayers,and
WHEREAS,It is important that Cities make their concerns known to our U.S.Senators and
Congressmen,state legislators,Governor and Lieutenant Governor,and
WHEREAS,Local elected officials have a unique opportunity and duty to educate citizens,business
leaders,and key stakeholders about the risk that the dramatic growth of tax-free online shopping
poses to local revenue bases,and
WHEREAS,the Advisory Commission on Electronic Commerce will consider proposals to address
e-commerce-related ta�cation issues,including one jointly submitted by the National Governors'
Association,Council of State Governments, National Conference of State Legislators,National
Association of Counties,US Conference of Mayors,National League of Cities,and International
City/County Manager's Association entitled"Streamlined Sales Tax System for the 21�Century."
NOW,THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FRIENDSWOOD,
TEXAS,that
1. the City of Friendswood does hereby support the reasonable application of sales tax on
applicable products and services purchased through electronic commerce,to ensure equitabie
treatment of retailers physically located in Friendswood and preservation of the local tax base
needed to deliver basic and expected government services
2. the City of Friendswood hereby oppases attempts by the United States Congress to enact
further legislation that might pre-empt the authority of state and local governments,and
3. the City will participate in educational and advocacy efforts as outlined by the National League
of Cities and will communicate with national,state and local officials regarding this important
issue.
PASSED,APPROVED AND RESOLVED this the 17�'da f January,2000.
Harold L.Whitaker,Mayor
ATT T:
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C' Secretary
APP OVED AS TO FORM:
City Attor ey