Arkansas lawmakers reject move to impose taxes on online sales

LITTLE ROCK—Arkansas legislators wrapped up the bulk of their work for the 2017 regular session Monday, approving a $5.5 billion budget and establishing a rainy day fund for future fiscal emergencies.

Gov. Asa Hutchinson said at a press conference Monday that the session successful.

“This is one of the most pro-growth, pro-jobs general assemblies that we’ve had in recent memory,” Hutchinson said.

Hutchinson said future legislative sessions would have to continue to find a long-term solution for the state’s highway infrastructure. A bill that would’ve sent a bond issue to voters during the 2018 general election failed to advance out of the House.

If voters approved the bond issue, a 6.5 percent sales tax on the wholesale price of fuel to fund the state’s highways would have been triggered.

The House and Senate will return early next month to tie up loose ends, and are also expected back sometime in May to deal with proposed changes to the state Medicaid program.

The Arkansas House failed in a last-hour effort to impose sales taxes on online purchases in which the buyer is in Arkansas and the seller has its entire physical operation in a different state. Rep. Stephen Meeks of Greenbrier said lawmakers had no business meddling with powers intended for Congress and that state businesses would suffer if they had to dedicate staff to tracking down tax information to benefit 49 other states.

“This is interstate commerce,” Meeks said. “This is one of the powers granted to the federal government.”

Rep. Dan Douglas of Bentonville said companies with an “economic nexus” to Arkansas should be required to collect and remit sales taxes on their goods, as in-state retailers must do.

“Technology has outpaced our laws,” Douglas said. “Our Main Street businesses are suffering now.”

The governor, who supported the bill, said the issue was one of fairness.

“It’s simply an issue of fairness for our tax system, and it helps our communities whenever you can have brick-andmortar stores and downtown businesses compete on a more level playing field with those business that are out of state that are marketing to our state,” Hutchinson said.

The governor said the issue will be eventually resolved.

E-commerce giant Amazon began collecting such taxes voluntarily last month, saying it would do so in any state that has a sales tax. Some legislators wanted to make sure all online retailers are collecting and remitting the taxes, but the effort received support from only 43 of the chamber’s 100 members.

Legislators last week reauthorized a program in which Arkansas uses federal Medicaid dollars to buy health insurance for its low-income residents but are expected to return to the Capitol next month to consider changes. The governor wants to impose a work requirement for some participants and also move some out of the program—if the federal government agrees.

The governor will continue to focus on the legal briefs for the eight men scheduled to be executed over a 10-day period beginning April 17. Arkansas has not executed a prisoner since 2005 because of legal challenges and drug shortages.

“I’m taking those one at a time to make sure each one gets the individual attention that is appropriate,” Hutchinson said. “We also want to be reminded, as we go through that process, of the victims of the crimes occurred. We want a balanced conversation during that time.”

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