Amazon ‘eFairness’ bill could put $100 million into ‘future tax cuts’ for Arkansans, says Sen. Files

Amazon, tuition exemption, and tax reform were topics of discussion at the inaugural Fort Smith Regional Chamber of Commerce 2017 Legislative Forum on Jan. 13, but it was an upcoming “eFairness” bill that stood out.

The chamber welcomed five members of the 91st General Assembly including House Majority Leader Mat Pitsch, R-Fort Smith; Rep. George McGill, D-Fort Smith; Rep. Justin Boyd, R-Fort Smith; Rep. Aaron Pilkington, R-Clarksville; and Sen. Jake Files, R-Fort Smith, and chairman of the Senate Revenue and Tax Committee.

On the topic of online sales and use taxes, Files said he will file an eFairness bill next week. The purpose is to “get a lot of our local guys back into the game” and collect existing taxes on goods purchased online through sites like Amazon.

To illustrate need for the bill, Files estimated enforcement would result in $100 million back into state coffers and said he expected monies to be redirected into “future tax cuts” for Arkansas taxpayers “over the next two to four years.” The outline for the plan will take shape over the next year.

“I’ll be filing a bill on Tuesday (Jan. 17) to replicate a bill that was filed in South Dakota that Amazon voluntarily decided to begin collecting sales tax in that state for remote sales,” Files said. “Right now, if you are going to buy a camera online instead of going to Bedfords (Camera and Video) – first of all, shame on you; second of all, you probably don’t pay the use tax that is due even if you want to pay it.”

Files said in 2016, there were 270 payments of the use tax by individuals statewide, “and I’m thinking there were probably more than 270 items that were purchased online. So that’s a bill that I think will get a lot of attention, and I think it’s desperately needed.”

When asked how long it might take for the state to see proceeds roll in, Files cited a program in Wyoming in which Amazon had agreed to report purchases to that state’s department of finance to create a record of transactions. (Amazon did not collect and pay taxes to the state itself.) The bill, Files said, was passed in November and is now taking effect, so on the same timetable, it is possible collections will begin well before the end of the year.

A second bill Files will pursue would call for the exemption of active guardsman from tuition at universities and colleges in Arkansas.

“Right now, there is a chance they’ll get covered with tuition, but it’s not a 100 percent thing,” he said.

Files hopes the legislation will help keep jobs at the 188th filled.

“Right now there are a lot of jobs that are open, and if that (188th) goes away, it’s a huge hole to fill in our local economy. Doing this will make us more competitive across state lines.”

Also Friday, discussion turned to the $50.5 million tax cut proposal from Gov. Asa Hutchinson. On Wednesday, two identical House and Senate bills were filed to lay the foundation for the proposal and set in motion plans for a blue ribbon panel that will study ways to overhaul the state’s tax code. Senate Bill 115, sponsored by Sen. Jim Hendren, R-Gravette, and House Bill 1159, filed by Pitsch, mirror the details of Hutchinson’s plan that would reduce the tax burden for the bulk of the state’s lowest wage earners making less than $21,000 a year.

Files said it was important the state “be cognizant that we are being responsible and not like a lot of the states that are boldly cutting taxes without a way to pay for it and now they’re having to come back after the fact and cut highways, cut higher ed, and cut a lot of the things I don’t think anybody wants to do here.”

Other notes from the forum included discussion about the future of healthcare in Arkansas with the probable repeal of Obamacare. “It’s really just a wait-and-see approach right now,” answered McGill, a point to which Boyd agreed.

The Fort Smith Regional Chamber of Commerce will host legislative forums every Friday while the assembly is in session with the next scheduled for Jan. 20 and the last on March 31.