An angle on collecting sales tax from Amazon, other online sales | Arkansas Blog

Sunday, January 15, 2017

An angle on collecting sales tax from Amazon, other online sales

Posted By on Sun, Jan 15, 2017 at 4:44 PM

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Rolf Wilkin of Fayetteville, owner of a group of pizza restaurants and president of the Arkansas Restaurant Association, tells me there is a way short of federal legislation to recoup some of the lost sales tax unpaid in Arkansas customer transactions with web giant Amazon.

I mentioned earlier that the Little Rock City Board wants to talk wth Arkansas congressmen about a long-pending legislative idea to require collection of sales taxes on Internet sales, with resulting payments to cities and counties and others now missing out on the commerce generated by physical businesses in their jurisdictions.

In theory, customers are supposed to voluntarily pay sales tax owed on purchases in Arkansas from Amazon, but few do.

Louisiana this year willl begin getting sales tax collections form Amazon and other online retailers thanks to a new state law. The Times-Picayune explains:

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.

Online retailers challenged a similar law in Colorado and, earlier this year, sought a ruling from the nation's highest court in the case. The U.S. Supreme Court last Monday (Dec. 12) chose not to hear the challenge, allowing the Colorado law to stand and paving the way for similar "Amazon tax" measures in other states.

Louisiana and Colorado are only the latest states to succeed in the push to collect more sales taxes from online retailers. Earlier this year, Amazon agreed to charge a flat 8 percent sellers use tax in Alabama.

The online retailer currently charges sales taxes in 29 states and the District of Columbia.
Wilson commented to me in an e-mail:

I spend a lot of time and money collecting and remitting sales tax for my 10 Arkansas pizzerias. I would love for Arkansas to follow the lead of Louisiana.

I have been writing legislators with this news. Charlie Collins and Uvalde Lindsey among others are interested in promoting sales tax equity between Arkansas businesses and Amazon.

I hope that you will spread the word of what we can do as a state.... right now.

Consider the word passed. But I should note the political problem here, as well as at the state level. While treating all commerce the same on taxation seems completely fair to me and many others, as well as putting honest-to-goodness Arkansas businesses on an even footing with the web giants that have dealt blows to so many people, it is not a universally popular idea. Republicans, particularly (though not universally) like the advantage no-tax merchants offer and view tax fairness, somewhat perversely, as a tax increase.

This would be a boon at every level of government. At the state level, some politicians have indicated they might like to see an Internet tax, but want it to be made "revenue neutral" by giving back the revenue in other tax reductions. I'd prefer to devote it to starved services, but ...

PS: Sen. Jake Files of Fort Smith apparently plans to introduce legislation along these lines this week.

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