Testimony to NCSL
National Conference of State Legislatures
Executive Committee Task Force
State and Local Taxation of Telecommunications and Electronic Commerce
April 6, 2006
State Government Relations
Equipment Leasing Association
I thank the Co-Chairs and committee members for time granted these comments on behalf of the 800 member companies of the Equipment Leasing Association, ELA, representing the commercial equipment leasing and finance industry. I am Dennis Brown, Vice President for State Government Relations. It is estimated that total annual volume of equipment leased was $ 213 billion in 2005. Equipment acquired by business through leases constitutes more than thirty percent (30%) of all capital investment made in the United States every year.
Equipment lessors have participated in Streamlined Sales Tax from the beginning. We join in collaborative discussions and support the project among business colleagues. Our commercial sector brings a different perspective as we are never considered a remote or voluntary seller. Ownership of the property we lease creates a collection responsibility even if acquired over the internet and the lessor has no presence in the state. Large and small lessors enduring complex and confusing collection responsibilities eagerly await multi-state simplification. Actions over recent months have not furthered that principle
State governments have not been able to hold a steady course toward simplifications promised when we began 6 years ago. One statewide rate was a founding principle diminished with the contradiction of one additional rate per local jurisdiction. Next change was further amendment allowing one additional state rate.
Business was told that at no charge a Certified Service Provider or CSP would perform all sales tax functions including determining tax due, paying states, and filing returns. States withdrew that commitment. CSP's will not have to sign up a seller if compensation is insufficient. Those currently remitting will be denied a CSP and many companies long compliant in Streamline states will be invoiced for CSP services.
Today we continue a yearly discussion about destination sourcing. I feel like Bill Murray in the movie Ground Hog Day being forced to repeat the same day time after time. Issues such as sourcing seemingly resolved are habitually revived at meeting after meeting. We remain supportive as this process is working towards improving administrative burdens such as registration, exemption certificates, electronic filings and uniformity of definitions and rules. However, on some topics we have shifted from forward movement to exercising on a stationary bike and at times back pedaling. The process should look forward and not backward otherwise we are not moving to simplification. Equipment lessors will remain supportive as states move forward with a strong respect for the fundamentals of Streamlined Sales and Use Tax Agreement.