Beebe v. the tax-cutters | Arkansas Blog

Beebe v. the tax-cutters

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John Brummett analyzes the coming legislative session, when the newly enlarged Republican contingent plans to introduce tax cuts of every description and Gov. Mike Beebe will resist on account of the lack of give necessary to accommodate the cuts. Throw granny out of a nursing home? Cut loose still more prisoners?

Here's a way, however, to satisfy both the tax cutters and, in time, revenue needs. Arkansas should do everything possible to assess the sales tax on Internet sales. The migration of sales from Arkansas retailers to on-line vendors is enormous. It's a mighty sword. As Internet commerce makes it harder for Arkansas businesses to stay open, particularly with the tax edge, it depletes state revenues. It seems only fair that a screw driver bought and delivered in Arkansas should carry the same sales tax whether bought at the neighborhood hardware store or from an on-line vendor. Internet businesses already are supposed to collect the tax if they have business operations in the state. But many do not.

UPDATE: There might be a good fight brewing on the Internet tax issue, by the way. I'm open to persuasion, but for the time being, I guess I'm on the side of Walmart. Since it has stores everywhere, it must collect the sales tax on its Internet sales, a disadvantage against, say, Amazon, which doesn't have to assess the sales tax, a decided edge in the final cost of a product. Lobbyists opposing an Internet sales tax — though they'll be paid by enormous on-line retailers — will be waving the consumer protection flag high if legislation is debated. That won't be dishonest, though it might hide the lobbyists' true interests. But if a sales tax is wrong on Internet sales, it's wrong on in-state retail sales. Problem is, state government can't operate without it.

It might be worth recalling an earlier column of mine that could have a bearing on Walmart's position at the legislature. Jim Walton, the Sam Walton son who's gone into banking in a big way, made many Republicans unhappy when he declined to put a lump sum contribution into the Senate Republican caucus. His lobbyist also expressed no interest in treating the Republican caucus as something of an equal in backroom discussions on a broad range of legislation. Though Walton is a banker and his primary interest is charter school legislation, he's still one of the controlling stockholders of Walmart. I think this could leach into the political dynamics on the tax issue. At least I hope so, for political sport if nothing else.

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