League of California Cities Urges Simplicity and Fairness in E-Commerce Tax Solution December 10, 1999 http://www.cacities.org/press_room/press_releases/e_commerce.htm With the Advisory Commission on E-Commerce set to meet December 14 and 15 in San Francisco, the League of Cities today announced its intention to press for simplicity and fairness in the e-commerce tax structure. "Cities across the nation are working hard to support strong downtown and neighborhood business districts", said Chris McKenzie, Executive Director of the California League. "A vibrant local economy requires that 'brick and mortar' merchants are able to compete with e-commerce and other remote merchants on a level playing field. Cities will lose retailers in their commercial districts, and face blight and increased unemployment, if e-commerce businesses can avoid responsibility for sales taxes when mainstreet businesses have to collect them." The e-commerce sales tax issue is emerging as a major concern for local and state governments across the nation. Under current federal law, states may not require e-commerce and other remote businesses to collect sales taxes on their transactions unless they have a physical presence in their state. The exploding growth of e-commerce will make community-based retailers less competitive and affect the ability of governmental agencies to fund needed public services. Mainstreet merchants are joining local and state governments in calling for equitable tax treatment, regardless of the mode of transaction. "We understand the importance of working with e-commerce businesses to find and build simplified and streamlined processes to deal with tax laws that differ from state to state," said McKenzie. "There are good models to look at to guide our work. One example is the streamlined building permit process that 29 cities and county agencies in Silicon Valley developed, working with some of the same high tech companies involved in e-commerce. They were able to develop standardized permit forms and processes, while still preserving local supervision of building construction activities." While a comprehensive solution to the e-commerce tax issue will have to be determined by Congress, numerous organizations throughout the country are searching for common-sense approaches that will inform congressional debate over the next few years. "California cities and merchants look forward to working with the E-Commerce Advisory Commission in the months ahead to develop equitable and understandable solutions," said McKenzie. "Tax fairness and simplicity won't be achieved without strong leadership from the federal government, and the League urges the Commission to make these goals its top priority," he added. FOR IMMEDIATE RELEASE League Contact: Megan Taylor, (916) 658-8228
