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Description
As retail in the U.S. moves toward an e-commerce future, both brick and mortar retailers and state and local governments must adapt to new challenges. Explore the factors changing the retail industry, how they affect state and local revenues, and what policymakers can do to ensure that commercial districts remain vibrant economic contributors.
A
Anyway,
good
afternoon,
everyone
I'm
Jackson
Brainard,
with
the
National
Conference
of
State
Legislators
like
to
welcome
everyone
to
this
session
on
the
tax
implications
of
the
evolving
retail
industry
fairly
topic.
These
retail
industry
is
extremely
important
to
state
and
local
tax
bases,
but
there's
also
a
lot
of
developments
taking
place
in
this
space.
The
continuing
rise
of
e-commerce,
news
of
sloughs
of
sobbing
mall
closures
and
then,
of
course,
there's
the
recent
Wayfarer
decision
and
the
elimination
of
the
physical
Nexus
standard,
all
of
which
have
significant
revenue
consequences.
A
With
their
remarks,
we'll
open
the
floor
to
your
questions,
I
just
want
remind
everyone
that
this
session
is
being
presented
with
audio
and
slides
on
our
webinar
platform
and
will
be
available
after
the
meeting
with
that
being
said,
I'd
like
to
introduce
our
first
speaker,
miss
Natalie,
Cohen,
miss
Cohen
is
managing
director
and
head
of
municipal
research
with
Wells
Fargo.
She
was
previously
president
of
the
National
municipal
research,
Inc
and
independent
consulting
company
focused
on
local
fiscal
conditions.
A
B
Thank
you.
Can
you
hear
me
all
the
way
in
the
back
you
guys?
Yes,
okay,
just
checking
it
would
be
warmer
in
the
room.
If
you
all
clustered,
you
know-
and
you
know
so
just
to
let
you
know
a
little
bit
about
what
I
do.
I
head
up.
The
municipal
research
group
at
Wells,
Fargo
securities,
mostly
focused
on
the
financial
side
of
things,
and
our
group
covers
sector.
B
So
I
did
a
piece
recently
on
some
of
the
transformations
going
on
in
in
property
sales
income,
tax,
physical
brick-and-mortar
and
how
that's
how
that's
changing-
and
we
also
in
my
group
I,
also
have
a
person
who
covers
all
things:
infrastructure,
higher
education,
housing
and
health
care,
so
we're
sector
based.
So
if
you're
you're
interested,
please
feel
free,
you're
welcome
to
the
research
there's
no
obligation
or
anything
like
that.
B
So
to
the
topic,
the
United
States
is
very
over
mauled
and,
as
many
of
you
know,
and
in
many
of
your
communities,
malls
have
been
closing
down
I'm
going
to
talk
a
little
bit
about
that.
The
places
where
they're
closing
down
are
typically
where
manufacturing
jobs
have
been
lost.
It's
basically
common
sense.
People
have
less
spending
money
less
likely
to
go
to
the
mall
and
shop.
B
The
u.s.
has
four
times
more
retail
than
either
Japan
or
France
six
times
more
than
England
nine
more
than
Italy
at
eleven
times
more
than
in
Germany.
So
it
gives
you
an
idea
of
some
of
the
excess
space
that
we
have
and
so
given
changes
in
manufacturing
and
dramatic
changes
in
technology.
We're
also
going
to
cover
the
online
sales
issue
in
this
panel.
Many
of
the
malls
are
closing
down.
B
For
example,
I
looked
at
December
16
to
December
17th,
so
it's
just
a
one-year
time
period,
general
merchandising
stores
lost
90,000
employees,
clothing
and
accessory
stores
lost,
29,000
and
furniture
and
furnishings
dropped
7,000.
So
you
know
that
was
that
was
significant
and
yet
on
the
non
store
retail,
which
is
another
category
in
the
jobs,
the
pickup
was
only
17,000
over
that
time
period.
So
online
sales
is
a
lot
less
labor-intensive
than
the
malls,
the
shopping
centers
and
the
retail
component
that
are
being
replaced
by
the
the
person
that
you
reach.
B
When
you
call
in
your
sale
or
not
even
anymore,
when
you
make
those
clicks
on
your
on
your
computer,
the
GAO
as
this
may
my
colleagues
may
repeat
this,
but
the
GAO
did
a
study
and
the
online
sales
and
estimated
there
was
an
estimate
from
different
studies
of
between
8
billion
and
30
billion
a
year.
Gao
estimated
that
the
loss
to
state
and
local
government
was
could
they
could
have
been
captured.
Was
about
13
billion
dollars?
B
It's
a
lot
of
money
that
can
come
back,
and
so
we're
going
to
talk
on
the
panel
about
post
Wayfair
and
what
that
means,
but
on
to
the
sort
of
the
physical
transformations
I
did
on
in
this
particular
piece
did
a
spotlight
on
Ohio,
which
is
one
of
the
states
Ohio
Pennsylvania,
Kentucky
or
the
states.
Is
anyone
from
those
states
in
the
room,
just
okay
Ohio
some
of
the
changes
in
Columbus,
Dayton
and
Springfield,
just
by
contrast.
B
B
Open-Air
festival
comes
to
mind,
but
not
really
it's
more
their
seating
and
what
they
did
was
surrounded
the
mall
with
with
or
the
the
grassy
area,
with
food
and
entertainment
facilities,
holding
events
and
so
on,
and
in
fact
there
has
been
some
reports
of
increases
in
property
value,
so
that
would
trigger
off
the
property.
Taxes
approves
through
the
sales
tax
from
the
mall,
but
also
sale,
restaurant,
food
services
and
entertainment
attendance
and
so
on
so
creating
additional
vitality
in
an
area
that
had
been
somewhat
of
an
eyesore
in
the
downtown
area.
B
Other
places
like
Dayton
have
been
converting
historic
properties
using
the
tax
credit,
less
value
now
given
tax
reform,
but
that's
still
happening.
Some
of
the
older
cities
have
historic
buildings
and
they're
being
used
for
micro,
multi-family,
housing,
affordable
housing,
smaller
shops
and,
in
particular,
high
technology
office
space.
So
using
them,
as
you
know,
economic
generators
in
an
area
in
a
beautiful
historic
building.
Those
are
some
examples.
B
Springfield
Ohio
has
also
been
named
in
a
couple
of
studies
as
a
place
that
was
very
hard
hit
by
mall
closings.
They
are
a
city
that
was
150
percent
dependent
on
the
income
tax
and
so
the
loss
of
jobs.
The
loss
of
the
the
mall
was
made
a
pretty
big
difference.
They
also
are
renovating
historic
building
to
create
a
tech.
You
know
a
tech,
incubator
and
a
couple
of
other
facilities
around
to
bring
in
technology
whether
it's
healthcare
technology
or
you
know
our
coding
or
new
types
of
services
and,
interestingly,
the
city.
B
The
other
thing
I
wanted
to
bring
up
before
I
hand
over
to
another
panelist
is
that
you
know
it's
important
to
be
mindful
of
what
the
transformation
is
that
is
taking
place
and
how
that
then
ties
into
the
tax
revenues.
So,
for
example,
there
are
a
couple
of
malls
in
the
st.
Louis
metropolitan
area,
where
the
anchor
store
is
being
converted
into
a
tech
center
for
a
tech
help.
You
know
for
Colin
and
it's
not
producing
sales
tax,
but
it's
producing
jobs.
B
So
the
question
is:
do
you
have
an
income
tax
in
your
community,
but,
given
that
filling
that
anchor
store
was
is
a
strong
positive
for
the
community
and
the
the
rest
of
the
mall
is
now
still
used
for
the
food
court
for
employees
in
the
facility.
For
various
services
that
you
might
find
in
and
say
a
strip
center,
or
something
like
that,
so
those
are
there's
a
architectural
company
in
the
st.
Louis
area
that
is
actively
engaged
in
redoing,
some
of
the
some
of
the
shuttered
facilities
and
replacing
them.
B
Some
other
examples
are,
you
know
24-hour
fitness
centers
there
are
movie
theaters.
There
are
community
colleges
and
educational
entities
that
are
going
into
anchor
stores
all
around
the
country,
so
there
is
a
lot
that
can
be
done,
not
necessarily
to
pull
in
more
sales
tax,
but
to
retain
the
economic
vitality
and,
along
with
that,
I
would
like
to
just
add
a
comment,
and
this
came
up
in
our
in
our
calls
is
to
be
careful
not
to
give
away
this
store
so
to
speak,
because
gatsby
has
recently,
within
the
last
year
too
changed
the
accounting
rules.
B
Gatsby
77
is
requiring
disclosure
of
the
various
tax,
abatements
and
tax
benefits
that
are
given
to
corporations.
I
know
there
was
a
story
recently
about
a
track
in
San
Bernardino,
which
went
through
a
bankruptcy
attracting
an
Amazon
packing
warehousing
facility,
and
in
fact
you
know,
the
dock
that
were
created
were
very
part-time
and
there's
very
high
turnover
there.
So
not
necessarily
creating
the
kind
of
high
paid
jobs
that
you
want
to
ultimately
attract.
B
C
At
Jameson's
department
store,
which
unfortunately
went
bankrupt
yeah,
but
it
was
a
very
prosperous
mall
when
it
first
opened
up
a
lot
of
excitement
because
it
was
a
downtown,
thriving
mall.
But
you
know
Columbus.
The
growth
for
the
wealthier
areas
of
the
town
was
in
the
northern
park
and
two
malls
ended
up
opening
in
the
northern
part
of
Columbus
and
unfortunately
that
pretty
much
made
the
city
center
no
longer
the
new
cool
ball
to
go
to.
So,
ultimately,
it
turned
into,
as
you
would
indicated,
and
more
beautiful
green
space.
Now.
A
Well,
thank
you
Natalie
next
I'd
like
to
introduce
Ron
Rocco,
the
Lincoln
Institute
of
land
politics
Massachusetts.
Mr.
Rocco
is
a
fellow
in
the
evaluation
and
Taxation
Department
and
has
been
a
frequent
speaker
on
property
tax
and
municipal
finance
issues.
Prior
to
his
role
at
Lincoln,
Ron
was
the
Commissioner
of
the
city
of
Boston
assessing
department
where
he
served
for
25
years.
He's
recently
served
as
the
chair
of
the
Research
Committee
of
the
International
Association
of
assessing
officers
and
was
awarded
that
organization
in
Donohue
Si
award
in
2013
thanks.
D
D
But
when
we
talk
about
what's
happening
in
the
retail
world,
you
know
a
lot
of
us
when
we
think
about
retail,
we
think
about,
and
we
think
about
taxes,
if
you
think
about
the
sales
tax,
but
the
the
retail
market
is
also
in
a
very
important
part
of
the
property
tax
base,
as
well.
So
just
a
quick
overview.
Just
kind
of
put
this
into
some
context.
Property
tax
revenues
now
account
for
about
thirty
five
percent
of
our
total
state
and
local
revenue
structure.
D
So
but
roughly
one
third-
and
it's
been
pretty
consistent
in
that
amount
for
a
long
amount
of
time
when
you
look
at
the
retail
sector
of
the
property
tax
base
and
we
look
at
all
commercial
properties,
retail
is
about
a
quarter
of
all
of
our
retail
property.
So
it's
again
a
pretty
significant
chunk
of
our
property
tax
base.
D
Now,
as
Natalie
mentioned,
our
retail
environment
in
the
United
States
certainly
is
changing
and
it's
changing
pretty
rapidly
is
how
he's
doing
a
little
bit
of
reading
in
preparation
for
this
session?
A
comment
that
I
saw
a
couple
times
is
that
retail
was
undergoing
changes
not
seen
since
the
introduction
of
the
shopping
mall.
D
You
know
that
had
me
scratch
I
didn't
realize
the
introduction
of
the
shopping
mall
was
such
a
watershed
moment
in
human
history,
but
it
clearly
it
was,
and
now
that
we're
seeing
some
of
those
those
malls
falling
on
hard
times,
it's
equally
important.
So
certainly
the
demise
of
the
the
anchor
department
store
is
out.
There
happening
we're
seeing
big
changes
in
consumer
behavior.
There's
a
lot
less.
Spending
on
clothing
in
housewares,
there's
a
lot
more
spending
on
dining
out
and
other
types
of
entertainment
and
and
retail
customers.
D
Now
they're,
not
just
going
to
pick
something
out,
they're,
also
kind
of
looking
for
a
lot
more
vibrant
retail
experience
and
being
very
selective
and
where
they
shot.
Because
of
that
and
Natalie
mentioned,
and
everyone
knows,
ecommerce
is
obviously
also
having
a
huge
impact
on
brick
and
mortar
retail.
D
So,
in
order
to
get
that
capture
that
we
need
to
see
how
the
changes
are
impacting
those
values
now,
most
retail
properties
are
bought
and
sold
really
on
their
on
the
basis
of
their
ability
to
produce
income
and
there's
a
pretty
basic
capitalization
formula
that
Assessors
use
to
turn
that
income
into
value.
It's
really
looking
at
the
net
income
of
the
property
and
dividing
that
by
it's
an
investment
desirability,
so
there's
some
inputs
either
going
to
that.
So
on
the
top
part
of
that
line,
where
we're
looking
at
income,
it's
it's
really
pretty
simple
relationships.
D
There's
the
rent
that
the
property
commands
and
if
the
rent
goes
up,
the
property
becomes
more
valuable
as
rents
decrease,
it
becomes
less
valuable.
Vacancy
is
a
very
important
component.
If
you
have
a
vacant
mall,
obviously
that's
going
to
be
a
less
valuable
than
one
that
is
fully
occupied
and
then
the
capitalization
rate
that's
a
little
bit
more
of
a
nebulous
concept,
but
it's
really
an
overall
measure
and
investment
desirability.
D
So
what
we're
talking
about
there
are
things
like
the
cost
of
equity,
the
cost
of
debt
and
also
just
the
risks
that
are
associated
with
property.
So
if
you
have
properties
that
were
there's
high
demand,
a
good
economic
situation,
there's
gonna
be
less
risk
there
than
maybe
some
place
where
incomes
are
declining.
Sales
are
down
and
you
have
more
vacancies
so
I
to
really
see
what's
going
on
and
how
property
taxes
are
being
impacted.
I
went
and
looked
at
each
of
these
components
so
going
back
10
years.
D
If
you
look
at
the
general
retail
rents
that
were
in
place
in
2008
and
looking
to
the
first
quarter
of
2018
you'll
see
that
overall
retail
rents
went
down
a
little
bit
during
the
years
of
the
recession.
That's
not
that
surprising,
but
they've
rebound.
You
would
have
actually
grown
in
the
last
years,
so
they're
approximately
now
they're
about
the
same
place
that
they
were
before
the
recession.
D
This
the
story
isn't
the
same,
though,
for
shopping
malls.
There
you'll
see
that
you
know
shopping
malls,
actually
commanded
a
little
bit
more
rent
prior
to
the
recession.
They
came
down
and
they
have
recovered
somewhat,
but
they're
still
significantly
below
the
level
they
were
in
the
last
recession.
So
that
sort
of
shows
you
some
of
the
impacts
that
the
changes
in
retail
are
having
on
on
their
valuations.
D
D
That
rate
again
increased
a
little
bit
during
the
recession,
but
for
general
retail,
it's
actually
declined
pretty
substantially
it's
down
to
about
a
five
percent
overall
rate,
a
little
bit
less
than
that
which
is
actually
considered
pretty
healthy.
Overall
again,
the
the
news
four
models
again
is
not
quite
as
good.
D
So
when
you
kind
of
distill
this
down
and
think
what
are
the
real
estate
experts
really
kind
of
saying?
Well,
it's
not
like
brick-and-mortar
retail
is
dead
or
even
dying,
but
it
is
undergoing
some
significant
change.
We're
seeing
some
slight
uptick
in
vacancy
in
some
areas.
But
overall
the
vacancy
raised
really
pretty
good
overall
rent
growth
is,
is
there
it's,
maybe
a
little
bit
anemic
and
maybe
a
little
bit
less
than
we're
seeing
in
other
property
categories,
but
it
isn't
decreasing
me
either
in
a
lot
of
cases.
D
One
of
the
other
things
that
was
interesting
is
that
you
know
you
hear
a
lot
about
store
closures,
especially
their
department
stores
and
they're
they're,
really
big
news
when
they
happen.
But
when
you
actually
drill
down
into
the
statistics
move-ins
into
in
tommorows,
are
actually
still
out.
Casing
move
outs
that
now
that
the
spread
between
the
movements
move
out
to
the
narrowing
narrowing.
D
So
that's
a
little
bit
of
an
ominous
sign,
but
sometimes
when
somebody
backfill
is
one
of
those
spaces
that
gets
occupied,
it's
not
as
big
a
news,
but
that
that
is
happening
is
Natalie.
Natalie
mentioned
not
surprisingly,
the
retail
markets
that
are
struggling,
the
most
are
the
ones
that
are
probably
a
little
bit
more
challenged
economically,
where
you're
seeing
job
growth,
income
losses
or
maybe,
in
some
cases,
population
declines.
D
But
there
are
it's
not
all
bad
news
for
retail.
There
are
some
real
positive
changes
and
you
see
it
in
the
proliferation
of
the
lifestyle,
centers
or
dining
options,
and
when
you
get
into
areas
like
health
and
fitness,
personal
grooming,
restaurants,
those
are
areas
that
are
growing
and
they
really
can't
be
replicated
at
least
not
yet
in
the
online
world.
So
you
know,
some
of
those
areas
are
a
little
bit
more
insulated
from
some
of
those
types
of
impacts,
and
the
other
thing
that's
really
happened
is
the
construction
activity
in
retail.
D
So
those
are
some
of
the
macro
issues
that
are
going
on
so
and,
and
so
generally
speaking,
brick-and-mortar
retail
from
a
property
tax
perspective
is
doing
fairly
well.
But
there
are
those
sectors
that
we
talked
about
that
are
struggling
a
little
bit
more
specifically
the
malls
one
of
the
things
that's
very
interesting
about
the
malls
is
that
once
you,
you
start
seeing
some
of
those
stores
close
and
if
you're,
in
an
area
where
you're
not
getting
the
backfill,
the
valuations
of
those
types
of
assets
can
decline
and
they
can
decline
quickly.
D
So
I,
just
I
brought
up
a
couple
of
quick
examples
here.
One
is
the
Bangor
Maine
Maine
law,
so
they're,
the
all
owner
of
the
mall,
is
seeking
of
abatement
of
about
32
million
dollars.
That
mom
makes
up
about
half
the
retail
space
in
Maine.
So
it's
a
it's.
A
pretty
significant
portion
of
their
tax
base,
typical
story
where
the
Macy's
in
this
year's
Sears
stores
closed
the
mob
was
recently
appraised
by
a
lender
at
twenty
eight
point:
nine
million
dollars
as
recently
as
2007
it
was
appraised
at
one
hundred
and
twenty
eight
million
dollars.
D
So
for
a
city
like
Bangor,
that's
a
pretty
big
drop.
That
means
that
they
have
to
make
up
those
property
tax
revenues.
You
know,
either
by
raising
the
rate
on
everyone
else
or
an
actual
reduction
of
revenue,
so
that
could
be
quite
an
impact
on
community
we're
also
seeing
some
struggling
models
having
did
call
t-pain
their
property
taxes,
so
there's
an
example
into
in
New
York,
where
a
mall
opens
5.7
million
dollars
in
back
taxes
and
it's
facing
foreclosure
by
the
county
and
they're.
D
You
know
sort
of
the
same
thing.
The
assessment
went
from
fifty
three
million
dollars
to
thirty
six
million
dollars
in
2014.
The
taxpayer
in
the
in
2017,
was
arguing
for
a
value
of
only
fourteen
million
dollars.
So
you
know
those
are
just
some
examples
if
you
are
and
if
you
do
represent
a
community
where
there
is
one
of
these
types
of
facilities
and
it
is
struggling,
it
can
have
a
big
impact
on
the
tax
base,
so
you
might
be
getting
some
phone
calls
from
some
of
your
constituents
saying
hey.
D
D
It's
not
just,
though,
the
models
that
have
issues
and
I
just
I
wanted
to
highlight
a
couple
of
other
things
that
are
happening
in
the
property
tax
world.
One
is
vacant
storefronts.
This
is
very
interesting.
You
know,
even
though
the
Main
Street
retail
areas
they're
generally
doing
very
well.
You
still
are
seeing
some
vacancy
in
some
of
those
areas
and
and
there's
a
feeling
that
a
lot
of
landlords
are
really
kind
of
holding
out,
weeding
storefronts
vacant.
D
Maybe
they
have
a
tenant
that
isn't
paying
the
rent
they
want
that
they
let
that
business
go
that
their
lease
expires
and
then
the
space
stays
vacant
for
a
while
boston.
Reporter
recently
found
50
vacant
storefronts
on
Newbury
Street,
if
you're
familiar
with
Boston,
that's
kind
of
our
high-end
shopping
street.
D
The
New
York
Post
noted
some
significant
fakies
vacancies
on
the
Upper
West
Side
and
on
Broadway
and
the
Soho
area,
and
it's
getting
to
the
point
where
public
officials
and
even
and
people
in
these
districts
are
very
concerned
because
a
vacant
storefront
doesn't
generate
foot
traffic,
it
doesn't
bring
people
to
the
area,
so
it
can
be
really
be
a
drag
on
the
area
in
New,
York
I
know
they're,
actually
considering
a
vacancy
fee.
That
would
try
to
combat
that.
That
issue.
D
One
last
topic
I
wanted
to
I
to
talk
about
is
the
I,
don't
know
if
any
of
you
have
dealt
with
this
in
your
jurisdictions,
the
so
called
dark
stores
very
ominous
dark
stores.
I,
don't
really
like
that
term.
It's
really
the
issue
of
how
do
you
deal
with
big-box
stores?
So
that's
one
of
the
changes
that
we
have
in
the
retail
environment
is.
D
We
certainly
have
a
lot
more
biggest
box
stores
that
are
out
there
and
they
really
kind
of
present
a
unique
valuation
challenge
for
Assessors,
because
they're
generally
built
specifically
to
the
needs
of
the
one
tenant.
A
Lowe's
will
have
one
specific
way
that
they
want
their
buildings
to
be
built
with
specific
features
for
them
and
Assessors
believe
that
those
types
of
special
features
should
be
reflected
in
the
assessment
and
the
assessed
value
of
the
property.
The
retailer's
does
say:
no,
no,
no,
the
standard
is
really
value,
and
just
because
we
pay
to
do
that.
D
D
So
it
gets
into
some
kind
of
esoteric
arguments,
but
there's
a
lot
of
states
that
are
really
kind
of
struggling
with
this
I
know
that
I've
seen
cases
in
Indiana,
Michigan,
Wisconsin
Alabama,
where
you
know,
there's
been
some
pretty
significant
reductions
in
the
valuations
of
these
because
of
court
decisions,
and
you
know
states
are
wondering
what
to
do
and
their
local
officials
are
arguing
hey.
If
we
do
justice
the
taxes
on
these
big-box
stores,
everybody
else
is
going
to
have
to
pay
more
and
the
big-box
stores
arguing
hey.
D
You
know
we
I
just
want
to
be
treated
on
the
same
theory:
market
market
value
standard
there,
everyone
else's.
So
as
I
said
some,
this
is
really
kind
of
focused
a
little
bit
in
the
Midwest
right
now,
but
I
have
heard
about
it
in
other
places,
and
you
know
some
there's
some
legislative
solutions
that
have
actually
been
pursued.
D
So
it
really
needs
the
profits
property
being
vacant
for
a
longer
period
of
time
and
therefore
less
valuable.
Others
want
to
really
just
define
redefined
market
value
to
reflect
the
unique
properties
of
these
or
the
unique
characteristics
of
these
properties.
I
think
that's
a
little
bit
more
of
the
slippery
slope
because
you
can
start
running
into
some
constitutional
issues,
and
sometimes
you
have
some
unintended
consequences
when
you
start
doing
that
as
well.
But
it's
it's
an
issue.
That's
been
out
there
and
again
something
that's
automatic
of
the
changes
that
we've
been
seeing
in
retail.
D
So,
thank
you
very
much
for
your
attention.
I
guess!
The
big
takeaway
here
is
that
well,
brick
and
mortar
or
retail
isn't
dead
and
it's
still
generally
doing
pretty
well,
there
are
segments
where
these
big
changes
are
taking
place
that
are
struggling
a
little
bit
more
and
I
think
those
are
the
ones
that
and
your
communities
are
really
kind
of
need
to
keep
an
eye
on.
Thank
you.
A
Right,
thank
you
Ron.
Finally,
I
would
like
to
introduce
Fred
nice.
Mr.
nicely
is
senior
tax
counsel
for
the
Council
on
state
taxation,
which
works
to
preserve
and
promote
equitable
and
non-discriminatory
state
and
local
taxation
of
multi-jurisdictional
business
entities
before
joining
cost
fred
served
in
the
ohio
department
of
taxation
for
four
years,
as
a
deputy
tax
commissioner,
over
legal
and
for
the
prior
seven
years
as
the
department's
chief
counsel
he's
a
frequent
speaker
on
multi-state.
Tax
issues
and
those
on
NZSL
state
and
local
tax
force
will
likely
know
him
for
his
expertise
on
sales.
C
It
was
June,
21st
2018
and
it
was
really
a
game
changer
in
the
cells
in
use
tax
area,
where
the
US
Supreme
Court,
you
know
for
over
50
years.
It's
actually
been.
You
know
at
least
probably
seventy
years
the
court
has
pretty
much
used
a
physical
presence
test.
For
when
who
note
sellers
are
required
to
collect
estates
tax
where
they
do
not
have
a
physical
presence.
Now,
if
there's,
the
presence
doesn't
necessarily
mean
that
you
have
to
have
a
store
there.
C
You
know
physical
presence
can
also
be
achieved
by
the
fact
that
you
have
an
agent
that
is
operating
to
help
a
seller
in
a
state.
So
you
know
physical
presence
was
the
law
of
the
land,
but
it
is
no
longer
the
test
right
now,
as
espoused
by
Justice.
Kennedy
is
if
the
business
has
an
economic
or
virtual
I'm,
so
over
the
Internet,
and
you
have
your
showroom
on
the
internet,
a
virtual
presence
can
be
sufficient.
C
You
know
we
heard
some
talks
from
Ron
talking
a
little
bit
about
leveling.
The
playing
field
playing
field
is
something
that's
really
important.
There's
been
a
constant
struggle
between
brick-and-mortar
stores
and
even
the
book
and
cliques
those
retailers
that
also
have
dot-com
entities
they
back
in
around
2005.
They
started
watching
tax.
C
Both
you
know
they
had
to
for
the
retail
stores
and
also
for
their
dot-com
stores,
but
you
had
the
other
segment
of
e-commerce
that
was
being
very
careful,
limiting
their
footprint
and
making
sure
they
didn't
have
physical
presence,
a
lot
of
states,
and
so
that
was
a
lot
of
the
battle
for
the
level
playing
field,
and
so
is
this
decision.
The
wafer
decision
is
it
going
to
be,
you
know
the
savior
for
the
retail
stores
and
you
know
keeping
the
values
up
or
having
an
increase.
C
We
don't
know
yet
I
mean
I,
think
you
know
it
could
be
a
good
discussion
and
interested
in
other
folks
comments.
I
think
it's
it's
too
early
to
say,
I
think
a
lot
of
folks
like
buying
things
over
the
internet
and
no
completely
eliminating
that
behavior.
Simply
because
you're
gonna
have
almost
all
the
internet
sellers
now
collecting
attacks.
It's
not
sure
that
that's
going
to
drive
everyone
back
to
the
stores
I
do
want
to.
C
Personally,
though,
when
you
look
at
the
wayfarer
decision,
the
NCSL
was
intimately
involved
in
this
process
and
Jackson
I
know
you've
attended
many
of
those
staying
local
task
force,
Weiser
II
committee
meetings
and
all
and
that's
bulky.
It's
the
one
that
really
eats
leaves
that
up
now
they
create
a
great
over
an
hour
discussion
yesterday
on
a
lot
of
Wayfair
issues,
but
it
was
really.
You
know
that
stained
local
task
force
and
standard
def
Peters
from
South
Dakota,
your
former
president
of
the
ncsl.
C
She
was
really
instrumental
in
getting
this
all
up
and
going
having
the
case
go
all
the
way
to
the
US
Supreme
Court
in
two
years
in
every
Court
to
overturn
some
precedent.
That's
been
out
there
I'm
Chloe
for
over
50
years.
That's
not
something
that's
easy
to
do,
but
it
really
was
the
state's
working
on
the
state
local
task
force
that
were
really
key
and
a
strategy
together
on
how
to
do
this.
So
I
give
him
a
lot
of
kudos
for
being
able
to
do
that,
and
you
never
had
mentioned.
You
know
the
figure.
C
You
know
what
is
some
of
the
states
have
had
because
you've
had
internet
sellers,
not
collecting
the
states
taxes,
it's
a
wide
range.
You
mean.
Incredibly,
you
know
the
estimates
from
the
GAO,
and
this
was
in
the
US
Supreme
Court's
decision
was
eight
billion
dollars,
233
billion
dollars.
Now
any
you
know
additional
revenue.
You
know,
that's
good.
You
know
the
states,
you
know
look
forward
to
that,
but
eight
billion
to
thirty
three
billion
dollars,
a
twenty
five
billion
dollar
spread.
That's
you
know
a
lot
of
a
difference
there.
C
So
I
think
you
know
a
lot
of
the
states
you
as
legislators.
There.
You
have
to
be
a
little
cautious
of
what
you
do
with
that
and
see
you
know.
What's
gonna
happen
with
the
revenue
that
comes
in
I
know,
you
know
a
lot
of
folks
know
they
want
to
be
able
to
reduce
taxes
or
use
it
as
an
enhancement
to
the
revenue
base,
but
we're
just
not
certain.
C
C
Dc
also
has
a
sales
and
use
tax
on.
It
really
stems
most
of
those
states.
Sales
and
use
taxes
come
from
the
Depression
era.
California
state
were
in
it,
you
know,
put
in
its
sales
tax
in
the
19th
early
1930s
Ohio,
where
I'm
from
they
put
themselves
in
use
tax
in
in
the
1930s.
So
it
was
really
on
you
know.
C
So,
even
though
you
know
you're
seeing
some
more
on
suspects,
we're
than
being
collected,
there's
still,
if
you
look
at
the
service
economy,
especially
looking
at
sales
to
end-user
on
consumers,
you
and
I
getting
haircuts
and
all
a
lot
of
these
states,
you
know
haven't
gone
there
to
pick
up
that
as
part
of
that
tax
base.
But
you
had
in
the
1930s,
the
states
impose
a
sales
tax
very
quickly.
C
The
sales
tax
in
general,
its
imposed
on
the
retailer
they're
first
they're
forced
to
collect
on
the
tax
based
on
the
sales
price
of
a
product
very
quickly.
The
states
realize
they
also
need
to
have
a
complimentary
use
tax,
and
that
is
you
know.
What
do
you
do
with
people
who
buy
something
from
outside
the
state?
Maybe
the
other
state
didn't
have
a
sales
tax
and
bring
it
in.
C
You
know
you're,
avoiding
the
tax
and
that's
when
things
are
very
quickly
put
in
a
use,
tax
concept
and
those
questions
before
the
US
Supreme
Court
in
the
1940s
on
whether
or
not
that
was
constitutional
and
in
1944,
the
US
Supreme
Court
addressed
about
3-4
cases
and
they
ultimately
upheld
that
the
use
tax
that
the
states
have
it
is
complementary
to
their
sales
tax
and
it
was
constitutional
and
in
those
cases
you
kind
of
get
a
sense.
The
court
didn't
directly
say
that
physical
presence
was
the
law
of
the
land,
but
really
looked
at.
C
You
know,
where
is
the
seller
located,
but
I
think
the
first
case
that
you
know
really
hit
it
pretty
solid.
Everyone
talks
about
Bella's,
Hess
out
of
Illinois,
but
I
would
say
it
really
goes
back
to
Miller
brothers
from
1954
and
that's
where
the
court
took
on
a
case
where
you
had
a
seller
in
Delaware.
That
was
advertising
a
lot
to
Maryland
customers
saying
come
in
and
buy
our
furniture
from
our
store.
C
You
know
we're
not
going
to
impose
you
the
Maryland
sales
tax
and
at
that
time
the
court
you
know
held
that
advertising
was
not
sufficient
enough,
but
where
the
court
made
it
very
clear,
they
were
using
physical
presence
as
to
test
that
was
in
1967,
and
that
was
the
Bella's
Hess
case
out
of
Illinois
and
then
was
a
lot
of
excitement
in
the
really
late
1980s
in
early
1990s
on
whether
or
not
you
know
the
court
would
reverse
that,
and
you
know
we
look
at
that
time
period.
That's
before
you
have
the
internet
going
on.
C
What's
going
on
in
the
late
1980s,
is
you
had
an
explosion
of
catalogs
sellers
right?
We
all
remember
that
we
used
to
you
know,
buy
things
I'm
using
the
catalogs,
so
the
states-
you
know
we're
very
concerned
then
that
they
were
losing
a
big
portion
of
the
revenue
base.
So
there
was
a
case
that
went
up
again.
This
was
one
that
was
very
strategized.
C
North
Dakota
is
the
one
that
took
the
lead,
and
you
know
the
states
were
anticipating
that
the
US
Supreme
Court
was
going
to
give
them
collection
authority
over
the
catalog
companies
and
unfortunately
it
didn't
happen
at
that
time.
Here
we
are
26
years
later
and
it
was
teed
up
and
you
know,
all
of
a
sudden,
you
add
the
US
Supreme
Court
saying
you
know
we
realize
that
you
know
we
were
wrong.
The
physical
presence
test
simply
doesn't
work.
C
Next
slide
this
law-
just
you
know,
talks
about
you,
know
and
shows
kind
of
the
frustration
and
I
think
you
know
when
you're
looking
at
the
frustration.
There
is
two
subsets
to
this.
You
first
you
have
to
look
at
the
mid
to
late
1980s
and
that's
the
room
with
the
catalog
sales
and
a
lot
of
the
states.
C
They
passed
legislation
similar
in
North
Dakota,
saying
that
if
you're
sending
all
these
catalogs
to
us,
you're
filling
up
our
landfills,
we
want
to
be
able
to
get
remote,
sell
our
collection
authority
and
I'm,
not
sure
what
I
did
here
today.
I
mess
something
up.
Okay,
it's
doing
something
weird
it's
gonna
be
really
hard
to
read.
But
Joe
has
this
slide
material,
though
I?
C
That
said,
you
know
the
catalog
sellers
should
be
collecting
the
tax
they
couldn't
be
enforced
by
the
states,
and
then
we
had
the
next
threshold
was
going
on
with
sells
over
the
Internet
and
that's
when
we
now
know
we
have
the
implosion
that
occurred
with
the
wayfarer
decision
and
you
add
a
victory
farm
for
a
lot
of
the
retail
stores
that
you
know
always
had
to
collect
the
state
sales
taxes
and
with
the
states
that
we're
missing
the
revenue
there.
It's
not
all
over
now.
You
know.
C
One
thing
that
was
mentioned
yesterday
is
that
when
you're
doing
with
the
marketplace
providers,
you
know
Amazon
eBay,
there's
still
a
question
over
whether
or
not
those
providers
should
be
are
actually
collected
and
remitting.
The
tax
on
behalf
the
sellers
or
whether
or
not
the
seller
should
be
doing
it.
So
so
I
said,
there's
still
a
lot
of
uncertainty
out
there.
C
Okay,
there
we
go
so
the
wayfarer
decision,
it
was
a
5-4
decision
on
one
thing,
I
think
was
really
important
to
make
it
clear.
Is
that
all
the
justices?
All
nine
were
really
not
comfortable
with
the
fiscal
present
standard
anymore.
The
reason
why
was
a
5-4
decision
is
five
of
the
justices
and
big
surprise
for
me
was
Alito
I
thought
Alito.
C
Would
you
know,
probably
be
more
conservative
on
the
side
of
not
changing,
start
decisis,
but
he
did
joining
the
majority
and
justice
Kenney
in
their
opinion,
saying
that
you
know
quell
and
national
Bella's
Hess,
they
you
know
serves
of
time.
They
don't
collect
the
realities
of
the
marketplace
and
again
you
know
the
test
that
they
talked
about
is
an
economic
virtual
presence
and
they
didn't
go
into
a
lot
of
detail
what
they
meant
on
by
that
they
gave.
Some
examples
talked
about
how
you
can
have
showings
on
the
internet.
C
That
can
actually
show
a
lot
more
products
than
what
you
would
be,
but
I
do
actually
in
a
physical
store,
so
definitely
have
changed
the
tests
there.
When
you
look
at
the
coil
decision,
if
you're
you
know
a
person,
that's
you
know
really
interested
in
state
tax
law
and
cool.
The
court
made
it
very
clear
that
the
Due
Process
Clause
was
a
different
standard
and
you
know
clearly
these
catalogs
dollars
back
at
that
time.
C
They
had
a
due
process
clause
presence
on
whether
it
could
be
held
to
be
subject
to
the
state's
jurisdictional
powers,
but
then
under
substantial
Nexus,
looking
at
the
commerce
clause,
the
dormant
Commerce
Clause
under
the
Constitution
that
there
wasn't
sufficient
Nexus
in
that
situation.
That
I
think
has
really
changed.
C
You
know
time
will
tell,
but
the
Court
did
say
you
know
that
you
need
to
look
at
the
other
prongs
under
a
four-part
test
that
your
Supreme
Court
has,
and
one
of
them
is,
you
know,
is
it
discriminatory
and
it's
it
caused
an
undue
burden.
So
the
case
was
remanded
back
with
that,
but
they
say
in
the
case
of
you
know,
the
court
said
think
there
is
probably
going
to
be
a
problem
here.
C
Your
supreme
court
specifically
noted
that
South
Dakota
was
a
member
of
the
streamline
sales
and
use
tax
agreement
and
outlined
some
of
the
key
benefits
that
provided
and
made
it
a
little
bit
easier
for
remote
sellers
to
be
able
to
collect
a
tax
so
doing
a
little
bit
with
the
transactional,
safe
harbor.
You
know
what
I've
been
used
by
South
Dakota
and
you,
but
probably
another
five
or
six
states
that
are
also
using
this,
and
that
is
200
sales.
C
We're
on
two
hundred
transactions,
that's
sufficient
for
the
state
and
saying
that
you
have
a
collection
obligation
or
if
you
just
have
over
one
hundred
thousand
in
sales.
Now
one
of
the
big
questions
that's
coming
up
is:
when
do
you
start
imposing
that
is
it
for
the
entire
calendar
year?
Is
it
only
for
that
part
of
the
calendar
year
when
you
actually
go
over,
and
you
know
one
of
the
suggestions
we
have
to
your
state
legislators
when
we
really
think
it
should
be
prospective
it
should
be.
C
You
know
only
at
that
moment
when
the
tax
payer
actually
goes
over,
because
retroactive
imposition
trying
to
go
back
to
the
beginning
of
the
calendar
year.
How
are
those
sellers
collect
the
tax
in
that
situation
and
the
purchasers
who
some
of
those
purchases
could
have
emitted
the
use
tax
to
the
state
I'm
not
near
promising
them?
You
know
many
have
like
there
is
that
possibility,
so
I
think
applying
that
prospectively
on
is
the
best
way
to
get
around.
You
know.
C
One
thing,
that's
really
interesting
is
that
you
know
there
was
a
comment
by
the
US
sister
of
general,
saying
that
you
know
actually
thought
you
know.
One
cell
into
a
state
should
be
sufficient
to
create
Nexus
the
port
in
go
there.
The
court,
you
know
I,
think
really
highlighted
that
you
do
need
to
provide
some
protections
for
small
sellers
to
make
sure
that
you
don't
have
an
undue
burden.
But
there's
this
big
question
with
you
know:
what
do
you
do
with
this
threshold?
C
We
know
South
Dakota,
it's
not
the
most
populous
state
out
there
in
the
country
in
California
is
much
bigger
by
population,
so
we're
looking
at
the
threshold
is
that
something
that
should
be
scale
should
the
200
transactions
100,000
in
sales.
Should
that
be
increased?
If
you
have,
you
know
10
times
the
population
of
South
Dakota,
maybe
should
be.
You
know:
2001
million
dollars,
yeah,
there's
some
arguments.
Yeah
there
have
been
made
by
some
businesses.
C
You
know
really
pushing
for
making
sure
that
threshold
is
scale
but
based
on
the
state
population,
but
I
will
also
say
other
businesses
in
other
states.
It
isn't
a
lot
easier
if
you
just
have
one
threshold
that
you
know
what
the
standard
is,
because
every
state's
gonna
be
similar,
and
so
that's
you
know
another
path
that
folks
have
been
leaning
down.
C
If
we're
more
perfect
uniformly
this
area,
though
I
think
you
know,
we
all
know
the
only
entity,
that's
going
to
be
able
to
do
that
is
Congress
your
Supreme
Court,
they,
you
know,
have
indirectly
blessed
South
Dakota's,
I'm
threshold
and
all
as
you
all
know,
you
know
the
US
Supreme
Court's,
now
legislative
body,
they
just
you,
know
basic.
You
can't
bless
something
they
can't
say
that
is
the
minimum
standard,
just
simply
using
the
threshold
on
retroactivity
again.
This
is
something
I
think
all
the
viewers
state
legislators.
C
You
need
to
be
very
concerned
with
making
sure
the
law
is
set
up
like
South
Dakota,
where
it's
going
to
be
perspective
and
I
think
you
need
to
make
sure
even
with
it
threshold
and
when
it's
other
goes
over
a
threshold.
That
is
perspective
and
remember.
You
know
it
is
a
fair
balance,
because
a
seller
in
the
next
year
in
the
subsequent
year,
they're
gonna,
have
to
continue
the
state
collect
estate
tax,
even
if
they
don't
go
over
the
threshold
in
the
way
these
threshold
laws
have
been
written.
C
So
it
really
does
I
think
create
a
balanced
approach
to
take
that
path.
You
know,
one
thing
to
point
out
is
you
know
we're
dealing
with
the
dormant
Commerce,
Clause
and
I.
Don't
have
time
to
be
able
to
do
all
those
details,
but
you
do
have
two
justices
that
they
were
part
of
the
majority,
but
you
know
one
justice,
justice
Thomas's
made
very
clear.
He
doesn't
believe
in
the
dormant
Commerce
Clause.
We
don't
have
a
federal
law
from
Congress
that
broad
base
says
that
states
can't
discriminate
against
interstate
commerce.
C
We
have
this
development
in
the
early
1800s
from
the
your
supreme
court
imposing
a
dormant
Commerce
Clause
saying
states
can't
impose.
Now
there
are
some
federal
laws
out
there
that
you
know
directly
say
states
can't
discriminate,
they
protect
the
railroads
materials,
the
airline
industry,
but
you
know
no
broad
general
wall,
jerk
justice
course,
which
is
kind
of
unknown.
He
just
Co
basically
said
that
you
know
whether
or
not
you
know
the
dormant
Commerce
Clause
should
still
exist.
That's
really
a
question
for
another
day.
C
You
know
what
steps
will
Congress
take.
Last
week
there
was
actually
a
hearing
in
the
House
Judiciary
when
you
have
bills
in
Congress
before
the
us
house.
They
go
to
the
House
Judiciary
for
their
hearings
and
I.
Think
it's
safe
to
say
that
there
was
no
consensus
on
exactly
what
Congress
is
going
to
do.
I
think,
there's
a
very
mixed
bag
out
there
and
the
legislation
is
out
there.
You
have
two
bills:
they've
been
out
there
for
the
last
two
three
sessions
of
Congress,
the
Marketplace
Fairness
Act
in
the
remote
transactions
community
act.
C
They
would
basically
allow
a
two
path
approach
for
the
states
to
sell
a
collection
authority.
One
is
if
you're
a
streamline
state
automatically
obligate
collection
authority
and
the
second
would
be
the
other
states.
You
have
to
meet
some
minimum
simplifications
better
place
in
the
bill.
If
you
look
at
you
know
the
states
I
think
from
the
agency
side,
a
lot
of
the
revenue
is
probably
like
a
Marketplace
Fairness
Act
better.
If
you
look
at
on
the
small
seller,
community
I
think
they,
like
a
remote
transaction
parity,
act
a
little
bit
better.
C
Just
because
there's
some
audit
protections
that
you
have
in
that
bill
that
you
don't
have
the
Marketplace
Fairness
Act,
there
is
a
bill,
though
that
was
been
out
there
for
at
least
a
year.
Basically
saying
that
you
know
we
should
retain
quill
in
that
you
shouldn't
be
able
to
impose
attacks
unless
you
have
a
fiscal
presence
and
that's
representative
Sensenbrenner
out
of
Wisconsin
HR
2087
and
then
just
recently
after
the
Wayfarer
decision.
There's
a
Senate
bill.
C
Stop
taxing
our
own
potential
to
stop
act
that
was
introduced
in
the
Senate
that
reinforces
that
quill
should
still
be
the
standard
and
not
certain
that
there's
really
gonna,
be
any
movement
and
all
out
there.
I
think
some
folks
are
really
pushing
for
some
uniformity
overall
I
think
some
uniformity
would
be
really
helpful,
especially
with
you
know,
studying
what
is
the
threshold
and
then
a
bill
that
you
know
some
folks
have
thrown
out.
C
There
is-
and
this
has
been
not
introduced
in
the
last
three
sessions
of
Congress,
the
Main
Street
Fairness
Act,
and
that
is
essentially
require
States
to
be
a
member
of
the
streamline
cells,
a
new
sex
project
to
be
able
to
get
most
of
the
collection
authority,
and
we
don't
want
to
forget
about
you-
know
we're
doing
the
retail
industry
here.
So
it's
very
property
tax
and
specific,
but
you
also
have
the
state
corporate
income
taxes,
in
other
words,
activity
taxes.
And
what
does
this
mean
in
that
area?
C
And
that's
something
where
you
know
you
may
see:
Congress
also
look
at
you
know:
should
we
not
only
set
thresholds
for
Wednesdays
can
impose.
There
are
taxes
against
remote
sellers
for
sales
tax
purposes,
but
it
should
it
also
come
into
play
when
states
are
trying
to
impose
their
tax
for
business
activity,
tax
purposes
and
a
lot
of
the
states.
C
You
know
over
ten
factor,
Nexus
provisions
in
the
corporate
income
tax
law
or
the
gross
receipts
tax
on
laws
that
they
impose
on
businesses
and
I
think
the
factor
presence
provisions
they
can
be
good,
as
a
radar
screen
for
leaning
on
businesses
know
that
you
know
you're
expected
you
anticipated
to
be
subject
to
that
state's
tax,
but
at
the
same
time
they
can't
be
an
automatic
threshold
for
asserting
liability.
In
my
opinion,
because
he
saw
the
due
process
clause,
you
have
to
show
that
a
business
has
the
requisite
connections
on
the
impact
of
Wayfair.
C
Again,
this
is
just
highlighting
what
the
court
addressed
about
South
Dakota
and
its
membership
in
the
streamlined
sales
tax
agreement.
You
know
some
of
the
things
I
think
that
are
extremely
important
that
are
listed
here:
single
state
level,
administration,
I,
think
everyone
agrees,
that's
a
lot
easier
to
collect
remit,
the
states
and
the
local
on
portion
of
the
state's
taxes.
C
If
you
have
single
state
administration
and
I,
give
kudos
to
Arizona
Arizona,
it
was
a
process,
but
over
a
bout
a
four
year
process,
they
were
actually
able
to
get
from
having
local
and
state
administration
of
their
sales
tax
and
went
all
the
way
over
to
just
having
state
administration,
Colorado,
Louisiana
and
Alabama.
Those
are
the
states
that
you
know
we're
hoping
we
can
get
some
movement,
some
improvement
and
just
have
single
state
level.
Administration.
Uniform
definitions,
that's
very
important.
C
Even
if
the
state
doesn't
want
to
be
a
streamline
state,
you
can
understand
that
there
may
be
some
concerns
or
issues
the
more
the
states
can
use
uniform
definitions,
digital
products,
that's
something
that's
adjusted
in
agreement.
That's
extremely
helpful
and
simplified
tax
rate
structure.
Tax
base
structures
is
very
helpful
to
our
tax
base
at
the
state
and
having
the
locals
use
the
same
base.
C
That
makes
it
a
lot
easier
for
both
your
in-state
sellers
and
your
remote
sellers
to
be
able
to
collect
attacks
when
you
have
a
sale
from
one
jurisdiction
to
another,
and
that's
something
that
Colorado
now
has
a
Tax
Simplification
workforce
that
working
on
that
hopefully
they'll
be
able
to
make
some
improvements
there,
but
Colorado
also
has
their
state
constitution
that
gives
a
lot
of
their
local
jurisdictions.
Home
Rule
Authority.
C
This
slide
right
here
on
the
Council
on
state
taxation
who
I
work
for
we
just
recently
put
out
our
first
scorecard
looking
at
the
state's
sales
tax
administration.
Not
surprisingly,
the
states
that
are
probably
with
streamlines
doesn't
use
tax
agreement.
They
did
better.
They
had
more
uniform
laws
on
the
streamline
sales
and
use
tax
agreement.
C
It
does
require
our
single
state
level
administration
of
the
sales
tax
so
as
a
whole,
they
were
a
B
state
and
if
you
look
at
the
non
streamline
States
those
states
they're
d+,
not
as
well,
but
we
really
like
to
see
some
improvement
in
the
overall
environment.
You
know
one
thing
to
look
at
is
exam
certificates
and
some
of
the
states
impose
a
good-faith
requirement
on
exemption
certificates
to
the
seller,
meaning
the
seller
has
to
police
whether
or
not
the
purchaser
qualifies
for
an
exemption.
C
You
know
if
you're
in
that
state,
you
know
you
can
probably
be
more
grounded
in
understanding
how
the
state
exemption
works
in
the
law.
So
if
your
remote
seller
and
trying
to
understand
all
the
state's
exemptions
for
agricultural
and
manufacturing,
that's
a
very
difficult
burden
and
I
would
be
hopeful
if
a
lot
of
the
non
streamlined,
States
would
look
at.
We
move
into
good
faith
Department,
because
the
streamlined
use
tax
agreement
it
doesn't
allow
it
and
the
sky
hasn't
fallen
the
revenue,
so
sex
revenue
still
comes
in
very
strong.
C
You
know
what's
next
now
that
we
have
wafer
out,
there
is
the
streamline
stores
and
huge
tax
agreement.
You
know
it's
still
going
to
exist.
You
know
I
think
it
will
I
think
you
know
they
do
have
a
registration
system
and
looking
at
providing
that
to
the
non
streamline
states.
So
I,
that's
something!
That's
gonna
be
able
to
help
sellers
collect
attacks.
They
also
on
they
already
have
a
system
using
certified
service
providers
that
provide
the
software
for
small
sellers,
be
able
to
collect
them.
C
The
attacks
and
the
streamline
states
actually
pay
on
the
csps
for
the
production
of
the
attacks,
where
small
seller
does
not
have
a
physical
presence
to
the
state,
so
you
know
even
be
nursing
to
see
what
happens
with
the
streamlines.
There's
a
news
tax
agreement,
but
you
know
one
of
the
big
problems
is:
if
you
look
at
the
big
six
states,
they
have
40%
of
the
u.s.
population,
California
being
one
of
them:
Texas
New,
York,
Illinois
Pennsylvania
in
Florida.
C
You
know
those
states
not
being
involved,
I,
think
that
is
going
to
be
a
hindrance,
and
hopefully
we
can
get
some
of
them
to
be
able
to
join,
or
at
least
adopt
more
aspects
of
the
agreement
on
the
MTC.
You
know
getting
involved.
I
think
that
would
be
something
that's
very
helpful
in
pushing
for
more
uniformity.
They
are
looking
at
the
marketplace
provider
provisions
and,
if
that
all
works
out,
you
know,
streamline
states
may
be
able
to
pick
that
up
and
actually
put
it
in
the
agreement.
C
23
states
so
with
that
this
last
slide
just
shows
on
the
slides
that
have
a
marketplace
facility:
a
provider
requirements.
I
think
this
is
going
to
be
the
hot
issue,
a
lot
of
you
as
legislators,
I
think
you
know,
you're
gonna,
have
your
revenue
agencies
or
you
on
your
own
or
what
we're
gonna
be
looking
at.
If
your
state
does
not
have
this
at
actually
looking
at
having
some
type
of
provision-
and
all
I
would
stress
here-
is
that
we
hope
the
states
can
be
as
uniform
as
possible.
C
A
Thanks
Fred,
yes,
so
we
have
a
standing
mic
here
for
anyone
who
would
like
to
pose
the
panel.
Some
questions
I'm
happy
to
kick
us
off
a
little
bit
Natalie.
You
briefly
touched
in
your
presentation
on
tax
credits
and
being
careful
not
to
give
away
a
store,
obviously
with
the
Amazon
bidding
or
a
lot
of
places
think
be
more
generous
with
those
incentives
of
ultimately
payoff.
A
B
Practitioners
called
them
quote,
table
stakes
because
everybody's
doing
it,
but
what
really
matters
is
your
transportation
facilities,
your
educational
facilities,
so
that
the
proper
employees
can
be
found
in
the
geographic
area,
the
physical
infrastructure
that
you've
got
and
so
on
so
I'm
just
putting
that
out
as
something
to
be
really
careful
about
and
then
again
you're
bidding
every
state
is
bidding
against
each
other.
So,
from
a
macro
perspective,
it's
not
additive
to
the
US
economy.
B
It's
just
a
business
from
one
place
to
the
next
and
then
again,
there's
you
know
new
disclosure,
relatively
new
disclosure
requirements,
and
that
obviously
makes
it
much
more.
There
is
a
group
out
there
called
good
jobs.
First
that
have
listed
the
various
revenues.
I,
haven't
their
methodology
on
the
surface,
looks
pretty
decent
it's
hard
to
pull
together,
but
the
various
companies
that
have
received
multi-billion
dollar
incentives
from
the
various
states
and
also
from
the
federal
government
to
do
to
locate,
to
expand
and
so
on.
So
just
be
careful
look
hard
I.
E
Nicely
you
mentioned
earlier
when
talking
about
South
Dakota's
transaction
limit
standards
that
if
they
do
200
sales,
for
example,
than
they're
held
to
that
standard,
and
is
it
correct,
like
you
said
that
doesn't
reset
the
next
year,
if
they
make
two
sales
the
next
year,
they
still
have
to
collect
those
taxes.
Does
that
ever
reset
correct.
C
So
the
way
their
law
is
written
is
that
for
the
current
year,
if
you
go
over,
200
transactions
or
$100,000
you'd
need
to
start
collecting,
and
then
your
you
had
to
look
back
then
that
if
you
had
in
the
prior
year
over
200
transactions,
100,000
sales,
you
have
to
collect.
So
you
have
one
year
what
I
call
Charlie
Nexus,
okay,.
F
Hello,
my
name
is
Christian
Beltran
I,
currently
work
with
Senator
glaziers
Office,
with
CalPERS
did
Senate.
One
of
the
bills
I'm
I,
remember
worked
on
this
year
was
SCA
22
change
the
allocation
method
from
point
of
destination,
point
of
sale
to
put
a
destination,
and
one
of
the
things
that
we
encountered
was
that
stakeholders
were
concerned
that
cities
that
have
these
tax
sharing.
F
It's
that
not
only
kind
of
touched
upon
these
tax
abatements
I
would
then
not
obligated
to
about
to
continue
entering
those
tax
repayments,
what
they
current
cities
if
they
are
located
in,
and
that's
basically
because
the
revenues
we
share
from
the
city
to
other
cities
throughout
the
state
and
in
turn
that
that
could
be
was
essentially
the
credit
ratings
for
those
cities.
Due
to
the
lack
of
revenues
going
in,
which
then
would
be
to.
C
Wish
I
had
the
perfect
solution?
Are
you
on?
This
has
been
an
something
that's
been
a
struggle
with
with
industry
and
sales.
A
new
tax
agreement,
initially
streamline,
was
not
going
to
allow
origin
sourcing.
So,
let's
make
sure
we're
all
on
the
same
page.
Here
when
you
have
an
interstate
sale,
all
states
are
using
destination.
C
You
know
when
you
pose
their
sales
tax
on
a
cell
from
a
seller
and
one
state
a
purchaser
in
another
state
it
only
when
you're
looking
at
the
seller
and
the
purchaser
being
the
saying
state
such
as
you've,
both
been
in
California,
some
states
use,
it's
called
origin
sourcing
and
I
would
just
highlight
to
you
that
I
think
under
the
wayfarer
decision
in
the
court
you
know
focusing
in
on.
Do
you
have
a
tax
that
discriminated
discriminates
against
interstate
commerce?
C
That's
a
question
that
may
be
raised
again
with
these
origin
states
and
my
former
state
I
was
with
Ohio.
You
know,
there's
always
that
question
of
Ohio
I'm
using
origin
sourcing
and
initially
it
had
a
case
that
came
down
from
it's
state
court,
saying
it
was
unconstitutional
but
Ohio.
Subsequently,
you
know,
as
adopted
the
streamlined
portions
and
it
hasn't
been
challenged
yet,
but
I
think
that's
somewhere.
You're
gonna
see
some
additional
litigation
as
far
as
a
cure,
I
owe
tried.
C
It
has
the
same
problem
with
it
has
a
county
in
Ohio,
where
25
percent
of
its
tax
base
was
from
a
single
seller
of
hard
work
and
also
just
a
huge
supplier
throughout
the
state,
and
it
made
a
huge
impact
if
they
would
go
to
destination
sourcing
rather
than
origin
sourcing,
and
it
was
tried
for
about
six
months.
They
have
a
distribution
formula,
it
didn't
work
and
also
in
the
Ohio
went
back
to
origin
sources.
I,
don't
know
if
there's
a
perfect
model
out
there.
Thank.
F
G
Good
afternoon
everyone
Jason
Strich,
SK
National
Retail
Federation,
really
appreciate
the
discussions
today.
Shopping
is
vibrant,
we're
seeing
a
lot
of
growth.
We
appreciate
the
comments
from
several
of
you
about
the
changes
in
the
industry
and
then
it's
not
really
dying
and
it's
just
advancing
and
changing
and
very
transformative
Natalie.
We
would
agree
with
you
we're
in
a
situation
where
we
are
over
stored
in
the
United
States,
there's
about
23,
approximately
23
square
feet
of
retail
space
per
capita
in
the
u.s.,
whereas
in
Great
Britain
it's
about
five
square
feet
of
retail
space.
G
So
anytime
you
have
a
situation
where,
throughout
the
70s
80s
and
into
the
90s,
you
had
real
estate
developers,
building,
bigger
or
larger.
If
you
build
it,
they
will
come
you're
going
to
have
a
market
correction
and
we're
seeing
that
happen.
One
of
the
points
I'd
like
to
make
it
was
speaking
to
a
smaller
retailer.
Just
last
week
they
started
their
business
he's
a
marine
with
his
wife
started
their
business.
They
manufacture
a
product
at
North
Carolina.
G
They
start
selling
it
online
and
through
the
wholesale
trades
and
they've
moved
on
to
various
online
marketplaces,
and
just
this
past
year
they
tried
to
open
their
first
retail
store
location
in
the
state
of
California.
They
had
a
tough
go
of
it:
tough
regulate
regulatory
environment,
higher
wages,
hard
hard
to
get
access
to
capital,
they've,
actually
moved
out
of
state
and
are
still
looking
to
open
their
first
store.
That's
just
one
of
thousands
of
examples.
G
We've
seen
out
there
so
I'd
urge
a
lot
of
the
policy
makers
here
and
the
legislators
here
that,
if
you
are
in
a
community
where
you're
seeing
vacant
storefronts,
there's
lots
of
small
business
people
out
there
who've
either
started
their
business
bricks
and
mortar
or
online
and
are
looking
to
grow
looking
to
get
into
those
spots.
So
please
look
at
your
overall
regulatory
environment
and
the
property
tax
growth
will
come
with
that.
Thank
you
and.
B
Thank
you
for
that.
The
models
are
also
changing
dramatically
as
I'm
sure
you're.
Very
well
aware,
and
some
you
know
you
have
stores
now
like
I'm
thinking
of
bonobos,
where
you
have
one
size
of
each
article
of
clothing,
you
go
in
there,
you
try
it
on
and
sort
of
the
joke.
Is
you
mean
I
can't
walk
out
of
the
store
with
this
and
well?
No,
because
it's
just
a
small
shop
and
then
it's
ordered
online.
It's
gonna
be
delivered
to
your
to
your
home.
B
So
there's
that
kind
of
a
model
Amazon
is
actually
opening
some
bookstores
in
a
number
of
places,
which
is
odd,
I'm,
not
quite
sure,
I
understand
that
strategy.
So
there's
a
little
bit
of
like
inside-out
that's
happening
in
terms
of
the
model
and
as
we've
talked
about
the
whole
experience
issue
has
come,
I
mean
we
certainly
have
seen
the
the
the
movie
theaters
and
events
and
whatever
is
going
to
attract
people
to
the
shopping
location,
is
changing
that
business
model
quite
a
bit.
It's
going
to
keep
changing
what?
B
A
I
guess
time
for
one
more,
so
obviously
the
the
queer
decision
and
the
tax
advantage
it
gave
to
online
retailers
watch.
It
was
obviously
hugely
impactful
to
the
industry.
Jeff
Bezos
famously
went
to
Washington
to
take
advantage
of
it.
Do
you
think
the
the
wayfarer
decision
will
be
similarly
impactful
in
the
direction
of
the
retail
industry
or
too
early
to
tell
yeah.
C
I
think
it
is
going
to
reduce
that
a
little
bit,
but
there's
a
convenience
element
to
it,
and
it
has
you
know
you
have
the
pendulum
kind
of
swinging
back
and
forth,
where
Amazon
used
to
do
everything
it
could
to
make
sure
they
didn't,
have
a
physical
presence
in
the
States.
Now
they
have
the
distribution,
centers
and
practically
all
the
states.
You
would
you
know,
mission
that
they
have
the
book
stores
that
they're
opening
up
physical
bookstores.
They
they
own
Whole
Foods.