LITTLE ROCK, AR – (1/18/19) The long-debated online sales tax has its best chance yet of passing in Arkansas, following a U.S. Supreme Court decision.
The outcome of the South Dakota v. Wayfair case allows states to require remote sellers to collect and remit sales tax for online purchases made in their states.
St. Rep. Dan Douglas, R-Bentonville, filed House Bill 1002 on the first day of filing for the 2019 session that would do just that in Arkansas, modeled off the South Dakota law SCOTUS affirmed.
Douglas presented the bill to a crowd of city and county officials Thursday at the Arkansas Municipal League’s Winter Conference. He said he received overwhelming support.
“It’s a fairness issue,” Douglas said. “I had retailers come up to me and say, ‘We have people come in that shop our products. They’ll take pictures of it and literally order it online on their phones there to save the sales tax.’ These are people that hire our local citizens, create jobs, support our schools and pay taxes, property taxes, to help maintain our cities and counties. It’s unfair to them.”
The Arkansas Department of Finance and Administration has estimated the state would generate more than $35 million annually from remote sellers, while cities and counties that collect the sales tax could see about $8 million.
Douglas noted the return to cities and counties would vary depending on what sales tax they charge.
His bill will not be the only online sales tax-related legislation debated during the session. Douglas said some of his colleagues may file bills that put certain caps on what sales tax cities and counties can levy.
Last year, the legislature’s Tax Reform and Relief Task Force recommended an online sales tax for the session. Gov. Asa Hutchinson has said he would support it.