Randy Zook: Message to Mr. Boehner – No More Stalling on the Marketplace Fairness Act

Editor’s note: Randy Zook, the author of this guest commentary, is President & CEO of the Arkansas State Chamber of Commerce & Associated Industries of Arkansas.

It has been widely reported that U.S. House Speaker John Boehner has promised that the Marketplace Fairness Act will not surface in 2014. Congress’s failure to act on this important measure is a huge setback for Arkansas’s businesses, for our retail and commercial industries, and is another blow by Washington to Arkansas’s economy.

The effort to pass the Marketplace Fairness Act has been led by our very own Representative Steve Womack (R-3rd District), a former Mayor of Rogers who knows full well the negative impact on local communities caused by uncollected taxes on Internet sales. Due in large part to Representative Womack’s efforts, the measure has long received wide bipartisan support in both the House of Representatives and the Senate – a fact evidenced by the Senate’s approval of the measure by a 69-27 margin last year. The measure empowers states to collect sales taxes – currently owed, but widely unpaid – by residents who make purchases from out-of-state companies through online transactions.

In Arkansas, its passage has significant direct, as well as indirect, benefits. For example, Arkansas’s revenue officials estimate the Act would direct approximately $100 million in new (and due) revenue to cities and counties, and $134 million to the state annually.

This unpaid and uncollected revenue is important for a state highly motivated to lessen the income tax burden on individual Arkansans earning between $20,000 and $75,000 annually, and to ensure that sales tax reforms, on items like groceries and overhead costs for manufacturers, remain in place or further improve. None of these important measures have much – if any – chance of success absent the state’s ability to absorb the $100+ million impact on the state’s revenues; cuts alone will not make achieving these vital goals possible.

Additional hurdles to accomplishing these goals are a well-documented prison overcrowding problem, as well as an aging highway system constantly in need of maintenance, to name just two. Arkansas continues to strive to provide an adequate and equitable education to our children and improve the resources for higher education, whether technical or general higher education – each arguably underfunded and the first to be cut each time state revenues are reduced or redirected.

Arkansas’s cities and counties have plenty of underfunded needs as well, particularly as applies to infrastructure. Passage of this Act will help ensure additional funding for city and county road and bridge, water, sewer and other essential improvements currently in progress or on the horizon. Passage of the Marketplace Fairness Act will not only help deliver the core basic services every Arkansas citizen relies on, but may very well delay the need by cities and counties to raise local taxes to do so.

Congress has been steadily shifting more responsibility to the states for a generation. So be it. But it is essential that it provide us the ability to fund those responsibilities, too.