An Arkansas Senate committee on Wednesday advanced legislation that would require out-of-state retailers that don't have a physical presence in Arkansas and don't collect sales and use taxes to notify Arkansas customers that tax is due on their purchases.
RELATED ARTICLES
http://www.arkansas…">Bid to require voter IDs moves on to full House http://www.arkansas…">Senate adds age, training to campus guns bill http://www.arkansas…">Governor signs agency changes http://www.arkansas…">Panel OKs boost in grocers' wine options http://www.arkansas…">Bill to soften life terms for minors advances http://www.arkansas…">State Capitol briefs
Retailers also would be required to notify Arkansas customers that the state requires the filing of a sales-and-use tax return.
House Bill 1388 by Rep. Dan Douglas, R-Bentonville, also would require out-of-state retailers to tell their Arkansas customers by Jan. 31 of each year of the total amount of each customer's purchases. By March 1 of each year, these retailers would be required to file annual reports with the state Department of Finance and Administration. Those reports would show sales to each customer and the total paid in the previous calendar year.
The bill includes penalties for out-of-state retailers and facilitators that fail to comply with its provisions, according to the finance department. The legislation is expected to increase compliance with sales tax laws, but the amount of revenue to be collected is unknown, the department said.
With a few dissents in a voice vote, the Senate Revenue and Taxation Committee recommended Senate approval of HB1388.
Douglas said his bill is based on Colorado law. He said the U.S. Supreme Court has declined to consider an appeal of a federal appeals court ruling upholding the Colorado law.
U.S. Supreme Court case law provides that an out-of-state seller must have "nexus," meaning a physical presence in a state, to be required to collect that state's sales and use taxes, the finance department said.
"The ideal would be for Congress to get off their butts and do what they need do," Douglas said.
David Ray, state director for the conservative group Americans for Prosperity, had opposed the legislation, saying the nation has too many tax jurisdictions for each to have its own policy for taxing online sales.
Douglas said: "I agree with the gentleman from Americans for Prosperity. We do not need a patchwork of every state having a different bill. This needs to be a national bill. But they have refused to do it. They are not doing it and we have to take action to protect our local businesses and to do what is right and fair in this state."
Meanwhile, Senate Revenue Committee Chairman Jake Files, R-Fort Smith, said he plans to present his own bill on online sales taxes to the House Revenue and Taxation Committee today. Files' Senate Bill 140 would require certain out-of-state retailers to collect sales tax on purchases by Arkansans and remit the taxes to the state. The bill failed to clear the House committee last week.
Files has said SB140 is based on South Dakota law. He's estimated his bill could increase tax collections anywhere from $32 million to $100 million a year.
The out-of-state companies affected by SB140 would include those that either have gross revenue exceeding $100,000 from sales of products and services delivered into Arkansas, or have sold products and services for delivery into Arkansas in at least 200 separate sales transactions, in either the previous calendar year or current calendar year.
Seattle-based Amazon announced Feb. 10 it would begin collecting taxes on its sales to Arkansans on March 1 and then pay those taxes to state government. The announcement came four days after the Senate approved Files' bill.
A Section on 02/23/2017