Arkansas panel supports effort to collect online sales taxes

LITTLE ROCK— A Senate committee on Wednesday backed legislation requiring online retailers who don’t collect Arkansas sales taxes to provide a list of purchases made by state residents, and a lawmaker said he’ll try again this week with a more expansive effort also aimed at recovering revenue from internet sales.

The measure supported by the Senate Revenue and Taxation Committee would require out-of-state retailers without a physical presence in the state to submit the list to finance officials and inform customers they owe Arkansas sales taxes. The House-backed bill, which now heads to the full Senate, is an effort to force online retailers to collect sales taxes rather than deal with the reporting requirements, supporters of the measure said.

“It’s easier for them to collect and remit,” Republican Rep. Dan Douglas told the panel.

The proposal and a Senate-backed bill that would require large online retailers to collect sales taxes are advancing less than two weeks after Amazon announced it would begin collecting Arkansas sales taxes in March. Lawmakers say the measures are still needed to recover money from other retailers that aren’t collecting the tax.

Republican Sen. Jake Files said he’ll try again Thursday before a House panel with his proposal requiring the sales tax collections, which stalled before the committee earlier this month. Democrats, who hold half the seats on the House Revenue and Taxation Committee, are pushing for language that would direct part of the additional tax revenue toward rural police and fire departments, pre-kindergarten and other needs.

Republican Gov. Asa Hutchinson said he’d consider signing both measures, depending on how they work together.

“I want to compare them both in that fashion — to make sure that while they’re achieving an important result and fairness, at the same time we’re not making it overly burdensome on business to comply with those regulations,” Hutchinson told reporters.

The measures face opposition from conservative groups, who say the issue of online sales taxes needs to be addressed at the federal level.

“Going down the path of 50 different state solutions in all 50 states is going to create a messy patchwork of compliance laws,” David Ray, state director of Americans for Prosperity, told the panel.