Bill To Collect Sales Tax From Internet Retailers Filed

A bill to force online retailers to pay sales and use tax like their bricks-and-mortar counterparts has been filed in the Arkansas legislature.

SB 738 by Sens. Jake Files, Jack Crumbly, Linda Chesterfield, David Burnett, and Stephanie Flowers defines sellers of products and services and outlines the rules for requiring online retail operations to remit tax collections to Arkansas like their Main Street competitors.

An analysis of the potential revenue windfall to the state is still being conducted by the Arkansas Dept. of Finance and Administration.

With the bill’s filing, Arkansas joins other states looking to level the playing field between local retailers and large online retailers. Discount online retail giants like Amazon.com or Overstock.com don’t currently collect sales tax on items sold. They contend that customers are obligated to make the payments voluntarily.

Several states like New York, California and Texas have sued Amazon in recent years to force them to collect sales tax from customers.

“This bill doesn’t create any new taxes," said Sen. Files. "It ensures that sales taxes already due are collected in a more efficient way. This will give consumers the peace of mind that they aren’t going to be liable for paying sales taxes after making online purchases, as they are now."

Supporters of the measure say it will close a massive loophole in current tax law that puts Arkansas small businesses – those that collect sales taxes locally — at a competitive disadvantage.
 
“Main Street retailers employ nearly 125,000 Arkansans and with high unemployment and hundreds of thousands of Arkansans already looking for work, we must protect local jobs, not subsidize large out of state online-only retailers,” said Mark Fleischner, owner of Lauray’s The Diamond Center in Hot Springs in a press release from a group supporting the measure known as Stand With Main Street.

The group has a web site – StandWithMainStreet.com – to provide positions on the issue.