Internet sales tax clears committee | Arkansas Blog

Tuesday, March 29, 2011

Internet sales tax clears committee

Posted By on Tue, Mar 29, 2011 at 10:42 AM

SB 738, the bill that makes a stab at collecting sales tax on goods sold on the Internet, cleared a House committee today on a voice vote, putting it in position for passage.

It will require affiliates of Internet retailers — say an Arkansas website that provides Amazon links — to collect the sales and use tax on goods purchased in Arkansas. It's not a perfect solution to ending the unfairness that exists because of the free ride Internet sellers have enjoyed, but until federal legislation can be passed, it's going to be an increasing trend in the states.

In theory, "use" taxes are owed on all purchases made on the Internet, at whatever rate applies in the place where the item is delivered. Needless to say, hardly anyone voluntarily remits it. The flight of retail to the Internet has had consequences not only for tax revenue, but for the "bricks-and-mortar" retailers. Though this battle has been cast as a fight for "Main Street," Walmart is the single biggest player in the battle to assess a web tax. It sells on the web, too. But because it has stores in every state — a so-called nexus — it must collect the sales tax on its Internet sales, while Amazon and similar often do not.

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