The 2017 legislative session concluded without passage of a bill to encourage internet merchants to collect and remit taxes on sales in Arkansas, though internet giant Amazon has begun doing so voluntarily.
It's a pity. A Koch-funded lobby spooked many legislators into believing this amounted to a tax increase, though purchasers legally are already obligated to pay the tax. The problem is that federal case law, which may be changing, holds that merchants without physical operations in Arkansas are not legally required to collect it.
In time, that will change, Governor Hutchinson said. He noted, too, that internet commerce had devastated Main Street commerce and battered tax collections. It's ironic that legislators, who get paid fat salaries and expenses thanks to local tax collections, are happy to let people take their business out of state to internet merchants with offices in states where they DO have to collect the taxes.
I have a further axe to grind. Little Rock City Directors joined the chorus supporting internet tax legislation, but their voices came way too late and were out of tune then.
City Director Dean Kumpuris, among others, lamented to an Arkansas Democrat-Gazette reporter that sales tax collections in Little Rock in 2016 had dropped from the year before. He blamed it all on the nasty old internet.
If only it were that simple.
Kumpuris and others choose to overlook Little Rock's generally tepid growth against many others in the region.
If the internet is the villain, wouldn't it reflect everywhere? But state sales tax collections rose from $2.05 billion in 2015 to $2.14 billion in 2016. In Pulaski County, collection of the countywide sales tax rose from $84 million to $88.8 million. Collections in Cabot rose from $8.6 million to $9.1 million. They rose in Maumelle from $2.4 million to $2.5 million. They rose in Benton from $15.4 million to $16.8 million. They rose in Conway from $24 million to $24.2 million. Bryant held steady at $13 million.
Mayor Mark Stodola boasted during his State of the City speech about population growth in the metropolitan area. Alas, that growth is coming more from Saline, Faulkner and Lonoke counties than it is coming from Little Rock. Where the main Bryant exit once featured a dairy bar as its primary commercial option, there's now a sprawling shopping center with brands that once could be found only in Little Rock.
And still city directors want to blame money problems on the internet. It also seems content to further decimate downtown neighborhoods so people can get home to those suburban cities faster on a wider concrete gulch of a freeway. For decades, it has contributed to the degradation of the city school district — even today many of the directors won't stand up for local control. The schools are an important factor in the movement to the suburbs.
The internet is a problem on revenue, sure. But an internet sales tax won't solve what ails Little Rock.
What if a day comes when an internet tax is collected? When the people who live in Sheridan, Lonoke, Cabot, Ward, Benton, Bryant, Conway, Greenbrier, Vilonia, Maumelle, Jacksonville and North Little Rock go home at night after work in Little Rock and log on to the internet to buy stuff, the taxes won't accrue to Little Rock's benefit. They'll stay where the buyers live.
Policymaking that builds the city, not the suburbs, is a smarter course.