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.
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.
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.”
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.
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:
For any questions or to get in touch with Adam at the conference, reach out to him at firstname.lastname@example.org.
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:
If you’re attending the Treasurers’ Association of Virginia Conference June 17-20, you’re in good company!
The Avenu team will be on hand to talk about the implications of HB 495 and other issues critical for Virginia’s local governments. As a sponsor of the conference Avenu is committed to the organization and meeting the revenue management needs of the state’s jurisdictions.
Please come to the Avenu booth and meet Senior Vice President Patrick Scott and Michael Ausberry from our business development staff. They’d welcome the opportunity to meet and discuss your particular revenue challenges. Or if you’d like to set a particular time at the conference for introductions, please email email@example.com and we’ll make arrangements.
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.
Avenu’s Yolanda Watkins Bailey, Perry Brasfield, Audrey Freemen and Randy Godeke will be present to answer any and all questions pertaining to:
“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.
Continuing its expansion, Avenu has launched an inside sales department and welcomes BC Alexander and Kaylee Yeatman as the first two professionals based in the Herndon, Virginia headquarters.
The team has already begun engaging local government executives about how Avenu’s revenue enhancement and administrative solutions can meet short- and long-term fiscal challenges.
An Iowa native, BC joins Avenu with a background in both engineering and business development. His master’s degree in computer engineering and experience in IT security development give him a unique perspective on Avenu’s technical offerings, while his recent work in business management and marketing will give him an edge in helping Avenu’s clients find the best solutions for their specific situations.
Kaylee comes to the team following an extensive background in customer relations. Her strengths include interpersonal communication skills, customer service, and familiarity with tax credit properties thanks to her time as a leasing specialist. Originally from Maryland, Kaylee is now a Virginia resident and is looking forward to helping all jurisdictions maximize their financial potential.
“I’m excited to work for a company that is reaching out to work with and help local communities. Avenu offers the chance for local governments to grow and prosper, and I’m eager to be a part of that,” Kaylee notes.
“Our national footprint is generating huge amounts of field information. The use of an inside sales team is going to both better assimilate that market intelligence and allow our Client Executives to share more critical information with customers. It’s an exciting time for this business,” says CEO Paul Colangelo.
Avenu has released Clearview, a software solution that allows local governments to deeply understand the data behind their revenue sources. With this context, city and county leadership make more informed decisions about spending, budgeting and policy.
Clearview’s graphic displays and geographic overlays show revenue streams from multiple tax types and explain when and why revenue shifts. If a large retailer exits a jurisdiction, for example, Clearview identifies the change and its impact on sales tax revenue at the category and sector level. Real-time data and the ability to run what-if analyses also demonstrate the effect of specific taxpayer changes and options for enhancing revenue.
“Clearview fills an immediate need for local governments challenged by increasing liabilities and other budget-consuming requirements,” says Paul Colangelo, CEO of Avenu. “They need better insight into what’s driving their revenue and trends among local businesses or business categories. With this they can anticipate changes and make adjustments as necessary.”
Through its graphic displays and geographic overlays, Clearview communicates details about revenue. This visualization helps managers and finance directors draw fast conclusions about their revenue data instead of trying to form assumptions from multiple spreadsheets. Another benefit of the solution will be pinpointing areas suitable for development and investment.
Customers testing Clearview placed the highest value on features including: