Municipalities Can’t Tax Internet Providers, Except When They Can

Mention the word “landline” to modern consumers, and you’ll likely get the same quizzical look as if you’d said “rotary phone.” As consumers shift almost uniformly to mobile phones and larger organizations rely on cable connections instead of DSL for their office “landlines,” the local income associated with telecom franchise fees has nosedived. Adding to the complexity of the revenue issue is the Internet Tax Freedom Act (ITFA) of 1998, which prohibits taxing internet usage – so, even though telecommunications companies are utilizing locally-owned phone lines to provide broadband internet access to residents, localities can no longer tax the services being provided like they used to.

However, creative minds have been working to find ways that accommodate the various federal statutes while still increasing revenue for local governments. In recent months, cities have started to pass legislation allowing localities to tax internet providers directly for using city right–of-ways (ROWs). It’s a highly technical loophole, but with broadband being at the forefront of the next major tax revolution, its one that your municipality may want to consider – and soon.

Read the full story by Avenu’s Jonathan Gerth at Efficient Gov.

Jonathan Gerth, Esq., is vice president of compliance auditing for Avenu Insights & Analytics. Contact him at Jonathan.Gerth@avenuinsights.com.

Governments in Alabama and Georgia Sign Up for Revenue Enhancement with Avenu

Local governments increasingly seek private-sector solutions when it comes to administering revenue programs, as the Avenu client roster shows.

Elmore County in Alabama has agreed to use Avenu for processing revenue for sales and use taxes, while in Georgia, Floyd County has engaged Avenu to audit its hotels and increase compliance with the requirements of the county ordinance. Avenu also will support Georgia’s City of South Fulton with compliance audits of its business license and alcohol taxes.

As pressure builds for jurisdictions to fund services without raising taxes, programs like these help by increasing the amount of taxes already owed and ensuring the fairness of the tax system.

Avenu’s Jonathan Gerth Shows Alabama how to Get the Most out of Its Sales Tax

Avenu’s Vice President of Tax and Auditing Services, Jonathan Gerth, is bringing his expertise to Opelika, AL on Aug. 15 for a one-day business workshop in partnership with the Opelika Chamber of Commerce. Titled “Everything You Want to Know About the Collection of Sales Tax in the City of Opelika,” the one hour seminar is designed to educate local chamber members and potential chamber members on topics such as municipal business licenses requirements, how municipalities apply rental taxes, and the Supreme Court’s ruling regarding sales & use tax. Interested parties are encouraged to register online. Registration is $10 for Chamber members and $15 for prospective members. Lunch will be provided.

The U.S. Supreme Court and Online Sales Tax: What the Wayfair Decision Means as of Today

On June 21, 2018, the U.S. Supreme Court ruled that internet retailers can be required to collect online sales tax, even in states where they have no physical presence. The landmark decision, South Dakota vs. Wayfair, Inc., reverses a 1992 ruling and can result in a greater revenue source for state and local governments. As explained in this free Avenu webinar held right after the ruling, there are still uncertainties that need to be worked out. Below are highlights from the presentation that inform local government leadership about online sales tax, its revenue potential and what must or may happen before those funds are realized.

It’s been estimated that state and local governments lose nearly $13 billion per year.

Consumers are increasingly choosing the convenience and savings of online shopping. However, if those purchases were made at brick and mortar stores, the sales tax revenue that governments would collect amounts to as much as $13 billion according to the federal General Accountability Office. Having an online sales tax will allow states, cities and counties to collect this money. All governments struggle with pension, operational and other costs, and raising taxes is not an easy option. This makes online sales tax a sound choice under the right circumstances; retroactive tax collection is not permitted.

The ruling includes protections for small online businesses.

The court specified that its ruling was applicable to businesses with more than $100,000 in sales or more than 200 unique transactions per year. This may provide some relief to small, independent online retailers that will have a more difficult time adjusting to a new tax code.

Congressional Action/Implementation Moratorium.

Some stakeholders are advocating for Congress to create a six-month moratorium on sales tax collection to help businesses comply with different state statutes. Therefore, a like outcome is that some states will need to modify their current legislation to comply with the decision. If states enact laws perceived as limiting interstate commerce, then there is a strong chance that Congress will draft a federal standard. There is no timeline for this to happen.

Implementation and Timing.

Several states are issuing guidelines and implementing these new rules, so this will take time. It is still possible that there will be appeals in the lower courts for specific areas of compliance. Localities need to stay vigilant and proactive to ensure they are receiving the revenue they are entitled to.

To hear more about Avenu’s take on the case and how it might affect your area, download and watch the webinar for free here or view it on YouTube.

 

Avenu Attends AMROA’s Summer Conference

Avenu’s friends in the South may have spotted the Avenu booth at the 50th annual Alabama Municipal Revenue Officers Association (AMROA) Summer Conference at The Westin, Birmingham this week. A dedicated partner to revenue administrators around the country, Avenu is thrilled to be a Silver Sponsor of the event and support the professionals who help ensure their municipalities are fiscally secure.

Avenu Business Development Executive Yolanda Watkins Bailey was on site throughout the event, answering questions, introducing Avenu’s tools and services, and listening to agencies needs and concerns when it comes to their financial matters.

“I love getting to meet Alabama’s municipal finance officers face to face and learning what helps them succeed. Avenu has such great resources available and I very much enjoy when we can show that to a local audience.”

If you missed Yolanda this week, feel free to reach out to her with any questions about Avenu or its services at ywatkins@avenuinsights.com.

US Conference of Mayors Touts Avenu’s Revenue Recovery Program

What are cities doing to remain livable? See the United States Conference of Mayors Business Council Best Practice Report for innovation at work. Avenu is honored to be included on page 10 for its hotel revenue recovery program in El Paso, Texas. Download report here.

 

Avenu to attend MASC Annual Meeting

Adam Rubin

South Carolina’s city managers will be on the lookout for Avenu Insights & Analytics at the Municipal Association of South Carolina Annual Meeting. Taking place July 18-22 at the Marriott Hotel, Hilton Head Island, the MASC is a place for local government leaders to network, learn, and share their own insights on how to best manage the state’s municipalities. An avid supporter of local agencies, Avenu remains committed to helping South Carolina’s cities maximize their revenue and run more efficiently, and will be on site throughout the week. Look for Avenu Business Development Executive Adam Rubin at sessions – he will be ready to answer your questions regarding:

  • Sales and use tax
  • Franchise fees
  • Property tax
  • Hotel and short-term rental taxes

For any questions or to get in touch with Adam at the conference, reach out to him at adam.rubin@avenuinsights.com.

Clearview: Download the webinar and try it for free!

Download our recent webinar by Avenu Senior Vice President Doug Jensen and Product Developer Eric Myers on how Avenu’s Clearview software can help you recognize and anticipate changes in your jurisdiction’s revenue. Doug highlights all that Clearview can do for your agency, and Eric goes over features such as graphic displays, overlays and real-time data. With this you can easily show your council, mayor and citizens why revenue changes occur and how they affect overall economic performance.

This free presentation will also provide you with an overview of how Clearview can:

  • Provide a cash distribution summary
  • Compare performance to other cities
  • Identify cash anomalies and provide cash distribution summaries
  • Highlight taxpayer producers (top and bottom performers)
  • Identify monthly cash changes and taxpayers driving change
  • Reconcile actuals to advances
  • Export data and visualizations

View the webinar for free on YouTube, and if you want to try Clearview Avenu is offering a free 30-day trial. Email webinars@avenueinsights.com to sign up.

Avenu Supports TCMA

In keeping with its history of supporting agencies and municipalities in Texas, Avenu will be sponsoring the Texas City Management Association Conference from June 21-24 in Galveston.

Client Executive Brenda Anderson

As a silver sponsor of the event, Avenu continues to demonstrate the value it places on local governments and its mission to provide accessible revenue solutions for agencies of all sizes. With this year’s conference theme of “Surviving the Riptide,” Client Executive Brenda Anderson will be on site to provide revenue management insight to attendees and answer any questions about getting your municipality through challenging times.

“Riptides can be intimidating and scary, but if you stay calm they are manageable – just like any budget problems you might face in local government. I’m looking forward to connecting with the cities and counties of Texas to show them that with the right tools, they can survive – or even prevent – these budgetary “riptides” with ease,” Brenda says.

Brenda will be on site all weekend, ready to address your city or county’s compliance solution needs and is eager to help ensure your agency is financially sound. Contact her at brenda.anderson@avenuinsights.com if you’d like to meet at the conference.

Avenu sponsors ACCMA Summer Conference

Avenu (formerly known as Revenue Discovery Services/RDS in Alabama) continues its leadership role in the state as a sponsor the Alabama City County Management Association Summer Conference, June 6-8 in Orange Beach.

As silver sponsors of the ACCMA event, Avenu will be co-hosting the Summer Social on Thursday evening. In addition, team members will be on hand at the Avenu booth to discuss your city’s or county’s particular revenue enhancement or administration challenges.

Perry Brasfield, Avenu Client Executive

Yolanda Watkins,  Business Development Executive

Avenu’s Yolanda Watkins Bailey, Perry Brasfield, Audrey Freemen and Randy Godeke will be present to answer any and all questions pertaining to:

  • Sales and use tax
  • Franchise fees
  • Property tax
  • Hotel and short-term rental taxes

“Avenu is committed to helping agencies in Alabama get the most out of their revenue. I look forward to meeting with local government leaders this week to work toward making a positive impact on our great state,” Watkins says.