HomeMy WebLinkAboutResolution 2607A Resolution
NO.~
RELATING TO THE SUPPORT OF LEGISLATIVE POLICY THAT PROVIDES FOR THE
TRADITIONAL TAXATION OF THE SALE OF PRODUCTS AND SERVICES CONDUCTED
THROUGH ALL FORMS OF COMMERCE INCLUDING
INTERNET OR ELECTRONIC COMMERCE
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 the sales tax comprises nearly half of the tax revenues
collected by states and distributed to local governments and
WHEREAS, state and local governments have experienced difficulty 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
traditional business and retail sources by 2002 and
WHEREAS, the U S Congress enacted the Internet Tax Freedom of 1998 which
pre empts state and local authority by establishing a three year moratorium on the
imposition of a 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 tax 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 a commerce will experience an unfair
competitive advantage over local `Main Street or `bricks and mortar" businesses if the
Internet Tax Freedom Act is made permanent and
WHEREAS, the National Governors Association estimates the state and local
government revenues from sales tax could decrease by as much as 20% by 2003 if the
Internet Tax Freedom Act is made permanent and
WHEREAS, a 10% reduction in sales tax revenues to the City of Fort Worth would
represent over $7 million in lost sales tax revenues (based on 2000 estimates) which
would result in either a 4 cent increase an the property tax rate or reduction of services
that could be equal to a loss to the police force of 109 officers the closing of all 12
branch libraries or the closing of all 19 community centers and their respective programs
and
WHEREAS, the City of Fort Worth 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 marketplace 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 local
governments must protect local retailers from unfair competition and must
preserve local tax bases needed to deliver basic and expected government
services
• Charging sales tax for online purchases of traditional goods does not represent a
new tax An item purchased over the Internet and an item purchased from a
local store should be subject to the same taxes
~ • Convenience not tax avoidance is what lures consumers to online purchases
r The payment of local sales tax has not restricted nor will it restrict the growth of
electronic commerce companies and
WHEREAS, it is important that cities make their concerns known to our U S
Senators and Representatives our state legislators the 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 local property tax rates or local
government services and
WHEREAS, the Advisory Commission on Electronic Commerce will consider
proposals to address e commerce related taxation issues including one jointly submitted
by the National Governors Association Council of State Governments National
Conference of State Legislatures 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 21st Century"
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FORT WORTH, TEXAS THAT
1 the City of Fort Worth supports the reasonable application of sales tax on
applicable products and services purchased through electronic commerce to
ensure equitable treatment of retailers physically located in Fort Worth and
preservation of the local tax base needed to deliver basic and expected
government services and
2 the City of Fort Worth opposes legislation at the federal and state levels that
might preempt the authority of state and local governments to apply sales taxes
on goods and services purchased through the Internet and
3 the City of Fort Worth supports the concept of tax application as detailed in the
report Streamlined Sales Tax System for the 21St Century" which was jointly
submitted to the Advisory Commission on Electronic Commerce by associations
representing local and state governments and
4 the City of Fort Worth supports the educational and advocacy efforts of the
National League of Cities and will communicate with national state and local
officials regarding this important issue
Adopted thiso2~~day of _ _____ (~h_ _ 2000
APPROVED
CITY COUNCIL
lAN 25 2000
~i~ea.~i
City Secretary Af Utz
Ctty of Fort lt~'arth,'~~x~^
~~ ~: Date # of pages
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Fax Note R7673 331 vo
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