Arkansas Online Sales Tax Bill Dead For Session

Mar 29, 2017

State Rep. Dan Douglas (R-Bentonville).
Credit Arkansas Times/Brian Chilson

A proposal for Arkansas to start collecting sales taxes from online retailers – like nearly every other state does – appears to be dead. A bill fell short in the House Revenue and Taxation Committee on Tuesday. It’s the third time this legislation session the measure has failed to advance.

Amazon has already volunteered to collect the tax but other retailers are still off the hook. The sales tax for out of state online purchases already exists but it’s up to individual consumers to report it – virtually no one does. The bill would have had online retailers taking in more than $100,000 a year, or 200 transactions collect the information for the state.

Supporters of the bill face opposition from conservative lawmakers opposed generally to collecting any new tax revenue and from Democrats who agree with the tax but want to dedicate revenue to certain areas, like pre-K and rural emergency services rather than sending it straight to general revenue. While other Republicans want much of the money dedicated to highways in lieu of a plan to raise gas taxes.

Representative Dan Douglas, the bill’s sponsor, said it deserves a straight up or down vote without devoting future revenues ahead of time.

“We might put more to highways. We might put more to some of these special projects that was in this amendment or we might decide to give a tax cut, on the income tax, back to the citizens of the state of Arkansas. But we can’t do a damn one of them unless we pass this bill,” said Douglas.

The Republican from Bentonville noted his colleagues had already divvied up potential future revenues in the House on Monday but neglected to actually authorize the tax collection in the first place.

“You’ve already spent this money. It’s already been spent in the House of Representatives, it was yesterday. We can’t have our cake and eat it too. We can’t spend it there if we can’t pass this bill here.” Douglas said to opponents on the committee, some of whom supported the full House’s action and some whom want a different division of funds.

The proposal was projected to bring in anywhere from $40 million to $200 million a year to state coffers. Rep. Douglas said he doesn’t plan to bring it up again this session.