Sen. Jake Files
SEN. JAKE FILES: Targets Internet sales for tax.
, with other co-sponsors, filed his legislation today
that is aimed at collecting sales taxes from "remote" sellers — in other words sales by Internet from companies with no physical presence in Arkansas.
It won't bring tangible gains to the state any time soon, if ever.
The bill requires Internet merchants to collect the sales tax, but it notes that this isn't allowed under current U.S. Supreme Court precedent. But the statute says it is intended to create a new court test of the old precedent. It notes some comments by Justice Anthony Kennedy that the court might reconsider that old rule.
The bill says the General Assembly intends to:
Clarify that the obligations created by this act would be appropriately stayed by the courts until the constitutionality of this law SB140 has been clearly established by a binding judgment, including without limitation a decision from the United States Supreme Court abrogating its existing doctrine or a final judgment applicable to a particular taxpayer;
It took two years from filing to final Supreme Court decision in the case that struck down the ban on same-sex marriage. Cases can sometimes take longer.
I had hoped Files' measure would mirror a new Louisiana law that just took effect
and led Amazon to begin voluntarily collecting sales taxes on purchases in that state.
Louisiana lawmakers passed a bill earlier this year that gave Amazon and other online retailers a tough choice — either collect sales tax or deal with the paperwork of reminding customers what they bought and how much they owe in taxes every single year.
Arkansas, like Louisiana, has a sales and use tax. Buyers are supposed to voluntarily report and pay taxes on purchases out of state, including by Internet. Virtually no one does.
Should this bill be passed and some day take effect, it would apply to businesses with at least 200 transactions in the state in a year and $100,000 in sales.
The politics of this measure is that the bill purports to enforce existing law in a way favorable to the state. It is harder to construe it as a vote for a tax increase, as opponents of Internet sales taxes have attempted to do.
Sponsors include Rep. Dan Douglas
of Bentonville, home of retail giant Walmart
. Since it has stores in every state in the U.S., it has no way around collecting sales tax from all its online customers. It's long favored collection of the tax to be on a par with Internet merchants. U.S. Rep. Steve Womack of Rogers, another Northwest Arkansas legislator, has been stymied in his congressional efforts to have national enforcement of tax collections, because the migration of commerce to the Internet has been damaging to government sales tax collections, particularly city and county governments that depend disproportionately on the sales tax.
Advocates of the sales tax collection like to point out that the chair of the committee that has held up the federal legislation has a son who works for eBay, which opposes the legislation.