Little Rock pushes sales tax measure for online retailers

LITTLE ROCK—Lawmakers must pass a bill in order for the city to sue online retailers over sales tax collection, a Little Rock official said.

The Arkansas Legislature tried to pass a bill this year that would’ve required larger online retailers to collect local and state sales taxes and remit those collections back to Arkansas, the Arkansas Democrat-Gazette reported. The bill passed the Senate but failed to pass the House.

City directors Dean Kumpuris and Lance Hines are proposing a measure that wouldn’t require online retailers to collect local sales taxes. Instead, the retailers would be required to send customer information to Arkansas so its cities could attempt to collect the taxes.

“Let’s quit trying to do this at the Legislature and let’s let the city of Little Rock take this on,” said Hines. “But we have to have this law in place in order to do that.”

Arkansas residents are required turn in a form on their purchases at the end of the year and pay any sales taxes due on those items. However, the state can’t enforce the collection without knowing who buys from where.

Kumpuris suggested that if Little Rock were to pass the measure, it would encourage every other municipality in the state to pass similar resolutions.

City attorney Tom Carpenter estimates collecting the tax would increase Little Rock’s financial reserves by about $10.5 million annually.

Little Rock Mayor Mark Stodola said he wasn’t sure whether collecting the tax on internet sales would increase Little Rock’s revenue by Carpenter’s estimate, but he did agree that an increase would be substantial.