From the Director: Streamlined Sales Tax: No City Agreement
By Stan Finkelstein, AWC Executive Director
AWC’s Streamlined Sales Tax (SST) Committee recently concluded their work without reaching agreement on an acceptable mitigation formula for those cities negatively and positively impacted by the implementation of destination-based sourcing.

The Committee has no further plans to meet, and it appears the city family will enter the 2005 legislative session without a unified position on the issue.

Following a difficult 2004 legislative session when cities were pitted against each other on various mitigation formulas, AWC asked 12 city officials representing both negatively and positively impacted cities to resolve the differences and develop an agreed-upon mitigation formula.

The Committee used an outside professional facilitator and began meeting in April. The Committee met once or twice a month, heard from state and national experts, used a technical advisory committee made-up of finance directors and attorneys, and finally formed a subcommittee of six in an attempt to resolve differences.

The subcommittee met on October 7, and when it was clear no agreement would be reached, concluded that meeting and the process.

The full Committee did agree on a number of issues, including a desire for equal taxation of sales whether conducted in the downtown store or via the Internet.

The Committee also agreed on various components of a mitigation formula. Specifics can be found in the notes the facilitator prepared following each meeting, which are posted on AWC’s website.

We do expect the Department of Revenue and/or the Governor to introduce legislation in 2005 implementing destination-based sourcing. They have drafted the bill and included money for mitigation but not a specific mitigation formula.

They were hoping we would reach agreement on a specific formula they could include in their bill, pending approval from the counties, the business community and others. Obviously, this did not occur.

We know the Governor and the Department are preparing and reviewing various mitigation proposals. It is not clear if a mitigation formula will be included in the legislation they introduce.

As their final act, AWC’s SST subcommittee requested AWC to “step aside and take no position on the issue.” The AWC Board will meet in December, at which time final direction will be given to staff. We will keep you posted.

As reported earlier, this is the most divisive internal issue the Association has encountered in the last 20 years. We appreciate the efforts of the 12 city officials who attempted to resolve the issue. Every committee member was committed to the process, made it a priority to attend the meetings, and worked long and hard with positive intentions. Thank you!!

Finally, we are confident that while city officials have agreed to disagree on this issue, the city family will continue to present a unified position and work together on a host of other issues currently being reviewed by AWC’s Legislative Committee.

AWC Legislative Committee – First Meeting October 7

The AWC Legislative Committee met for the first time on October 7 to review city issues currently being discussed by legislators and to entertain legislative proposals submitted by city officials. A great deal of time was spent in subcommittee meetings carefully examining the specific proposals.

The Committee will meet again on November 19 when they will review additional information and recommend specific legislative priorities for the AWC Board to consider on December 17. Please contact Jim Justin or me at 360-753-4137 if you have any questions about AWC’s legislative process.

 
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