Governor Geringer Calls on Congress to Preserve States’ Rights in Internet Taxation Policy

March 15, 2001

Washington, D.C.- Testifying today before the Senate Committee on Commerce, Science, and Transportation, Wyoming Governor Jim Geringer declared that states have the responsibility and authority to implement new approaches to tax and revenue solutions in the age of the New Economy.

Geringer, who testified on behalf of his fellow governors, the National Governors Association (NGA), and as co-chair of NGA’s E-Governance Task Force, said, “It would be unwise to usurp the most basic rights reserved to the states as to how they may or may not raise or lower revenues.”

Geringer noted that 7,500 different state and local tax jurisdictions are a nightmare for the private sector.  He said the desire is for simplified uniformity and to avoid federally mandated systems.

“We can and will craft a simplified tax structure that is close to the people, fair to both businesses and customers and equally applicable to all transactions,” Geringer said.

In his testimony, Geringer discussed the success of the Streamlined Sales Tax Project.  The Project is responsible for model legislation that would simplify state tax systems and has it been introduced in 19 states to date.  By enacting model legislation, states would enter a multistate compact unifying their systems and obtaining authority to require out-of-state Internet merchants to collect and remit sales and use taxes.

“The fact that we have 40 states that are willing to simplify their systems and dramatically reduce the complexity and cost of collection for all sellers is evidence of our commitment to adapt to the New Economy,” Geringer said, referring to the total number of states acting as official participants or observers in the Project.

Geringer said the issue goes beyond tax simplification.  These reforms would also protect important funds governors use for education, health, family services, and public safety.  He drew a parallel between the efforts of the Streamlined Sales Tax Project and the simplifications contained in the recently introduced Senate bill, S.521.  Governors support the bill’s provisions that would reduce the burden of state and local tax compliance.

The Streamlined Sales Tax Project has developed a system that would accommodate local option tax rates while simultaneously reducing the burden of administering those rates for remote sellers and other retailers. The Project has gained significant momentum in recent weeks.  On March 7, Minnesota became the 19th state to introduce legislation.  NGA has been a leader in enlisting the governors’ suport for the effort.  Wyoming recently became the first state to adopt the legislation into law.

The National Governors Association is the instrument through which the nation’s governors collectively influence the development and implementation of national policy and apply creative leadership to state issues.  Its members are the governors of 50 states, territories and commonwealths.

You can access more information on the NGA and the Streamlined Sales Tax Project at www.nga.org.