Minutes of TEI-MTC liaison meeting - Tax Executives Institute, Multistate Tax Commission - Panel Discussion

Tax Executive, The, July-August, 1996

Switching gears, W. Val Oveson of Utah said that the States and taxpayers had a common interest in moving toward the greater use and acceptance of electronic records. He referred to the efforts of the FTA's Electronic Data Interchange Task Force, in which representatives of the MTC, TEI, and other organizations are involved. He suggested that the development of an electronic exemption certificate would be a natural extension of the FTA's efforts. Mr. Oveson added that an electronic certificate could accommodate state-by-state exemptions, obviating multiple footnotes on the certificate. Mr. Mazerov added that States had to deal with issues relating to electronic signatures, but noted that the issues permeated the EDI area and were not confined to the exemption certificate area.

Mr. Hanson said that, if possible, the model certificate should be revised to encompass services before any effort were undertaken to expand the acceptance of the certificate by additional States, and such a revision would require the approval of the States that have currently adopted the uniform certificate. Mr. Anderson opined that the change might require but a single footnote. Mr. Mazerov agreed that it made sense to make the services change -- and to gain the acceptance of the current signatories -- before going out to other States. Noting that it took more than three months for the California-inspired changes to be approved by the other States, he cautioned against over-optimism in respect of whether and how quickly the change would be approved. Because of this strategy, it was agreed that TEI's involvement with the issue -- its urging other States to adopt the model certificate -- should be deferred until existing States had agreed to the services changes.

In summarizing the discussion of the uniform resale certificate, Mr. Bucks said the MTC staff would conduct a quick survey of States to determine whether the addition of a single footnote would permit the States to accept the expansion of the model certificate to services. If a significant number of States objected to the expansion of the form, the MTC would so inform TEI and the Institute would proceed to promote the wider acceptance of the current form. If expansion of the form to encompass services seemed easily attainable, the form would be so revised, and the Institute would then rev up its efforts. Regardless of when the project moved forward, an important second step would be to discuss potential additional changes in the model certificate.

Mr. Baldwin said that TEI appreciated the MTC's desire to work together to reduce taxpayer burden, and looked forward to working with Mr. Mazerov and other members of the staff on the project. He said TEI would await word from the MTC on when to proceed with its proselytizing efforts.

Nexus Guidelines

Lester D. Ezrati stated that taxpayers were concerned about the MTC's issuance of Nexus Bulletin 95-1, relating to whether nexus is established for income, franchise, and sales and use tax purposes where a computer manufacturer or marketer provides in-state repair services through third-party service providers. Mr. Ezrati explained that the bulletin seemed as much "advocative" as it was "reportorial," and asked what its issuance portended for the future. Were similar bulletins under consideration?