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RIFT OVER ALLOCATION STALLS BILL FOR SALES TAX ON MAIL ORDERS

An agreement among lobbyists for state and local governments on a bill allowing sales taxes to be collected from mail-order buyers has collapsed, triggering a sharp dispute Friday among groups representing the nation's mayors and governors.

At issue is the bill sponsored by Rep. Jack Brooks, D-Texas, chairman of the House Judiciary Committee, that would override a 22-year-old Supreme Court decision that permits customers to escape sales taxes on purchases from big out-of-state mail order houses.Groups representing local governments want the bill to include provisions guaranteeing that states, which would collect the taxes from the mail-order retailers, will pass along a portion to cities and counties - $436 million or more a year out of an estimated $2.4 billion in currently uncollected taxes, according to one estimate.

But Brooks' bill leaves it to the states to decide whether and how to pass on money to local governments. And the head of the U.S. Conference of Mayors angrily charged that the National Governors' Association had reneged on a signed agreement and agreed to cut the cities out of the bill.

Ray Scheppach, executive director of the National Governors' Association, acknowledged the bill does not match the agreement but said most states would act on their own to pass along a portion to cover local sales taxes, if Brooks' bill is passed.

"To walk away when you don't get 100 percent of what you want from word go, I think, is rather unsophisticated," he said.

The agreement was reached last year by the mayors' and governors' groups, the National Conference of State Legislatures and two other groups representing elected municipal and county officials, after Brooks had asked for unanimity among the government lobbying groups.

Brooks issued a statement Friday saying his bill was written to impose "a minimum of requirements" and "flexibility."

Cochran called reporters to his office Friday to denounce the bill and said he was angered by reports quoting anonymous state officials as saying the mayors were being "crybabies" over the deal. He said the mayors' opposition would jeopardize the bill.