CC Resolution No. 1419 2683
Resolution No. 1419
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, SUPPORTING THE REASONABLE APPLICATION OF SALES TAX
ON APPLICABLE PRODUCTS AND SERVICES PURCHASED THROUGH
ELECTRONIC COMMERCE, TO ENSURE EQUITABLE TREATMENT OF
RETAILERS PHYSICALLY LOCATED IN BAYTOWN AND PRESERVATION
OF THE LOCAL TAX BASE NEEDED TO DELIVER BASIC AND EXPECTED
GOVERNMENT SERVICES AND PROVIDING FOR THE EFFECTIVE DATE
THEREOF.
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 tax comprises nearly half of the tax revenues collected by
states and distributed to local governments; and
WHEREAS, state an C.�, ,.vim �� -� lty in collecting sales tax
on purchases made from oul Q '; and
WHEREAS, the grc ith which consumers can
engage in remote sales; and
WHEREAS, accorc and Technology Policy,
between 1997 and 1998, rei �o to 39%; and
WHEREAS, according to the Jupiter Communications, .,: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 Act of 1998 which
preempts 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 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 e-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
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WHEREAS, 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 Internet Tax Freedom Act
is made permanent; and
WHEREAS, the City of Baytown is a member of the National League of Cities, which 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, the following are some of the key messages guiding this campaign:
➢ State and local leaders strongly support technology advances and the opportunities
offered by electronic commerce. At the same time, state and local leaders must protect
local retailers from unfair competition and preserve tax bases needed to deliver basic and
expected government services; and
➢ Charging sales tax for online purchases of traditional goods does not represent NEW
taxes. A book purchased off a shelf at a local bookstore and a book purchased online are
and should be subject to the same taxes. If a consumer buys two books online and no
books at the local bookstore, the government has lost expected revenue from the sales
tax; and
WHEREAS, it is important that municipalities 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 taxation 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
2 1" Century';NOW THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS:
Section 1: The City of Baytown does hereby support the reasonable application of sales
tax on applicable products and services purchased through electronic commerce, to ensure equitable
treatment of retailers physically located in Baytown and preservation of the local tax base needed
to deliver basic and expected government services.
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Section 2: The City of Baytown hereby opposes attempts by the United States Congress
to enact further legislation that might pre-empt the authority of state and local governments.
Section 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.
Section 4: This resolution shall take effect immediately from and after its passage by the
City Council of the City of Baytown, Texas.
INTRODUCED, READ and PASSED, by the affirmative vote of the City Council of the
City of Baytown this the 131" day of January, 2000.
/,l'f e g4 i r tR--
PETE C. ALF RA Mayor
ATTEST:
EILEEN P. HALL, City Clerk
APPROVED AS TO FORM:
ACIO RAMIREZ, S ., C y Attorney
c:klh220\C ityCouncil\Reso I ution\lntemetS alesTmResol ution
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