The Jonesboro City Council passed a resolution supporting state and federal legislation that would enforce the collection of sales taxes from online transactions. The resolution now goes to the Arkansas Municipal League in Little Rock, where officials will ask for Governor Asa Hutchinson to call for a special session in a few weeks to consider the legislation. The state legislature voted down this legislation in the last session. Last night’s city council vote was not unanimous as eight aldermen voted in support of the resolution and four voted against. Jonesboro Mayor Harold Perrin.
“This piece of legislation is not a new tax. Legally, Arkansas residents are required to report how much money they use each year to pay for online transactions and sales taxes are supposed to be collected,” Perrin says. “Last year alone, 70 Arkansans reported on tax returns how much they spent on online sales, compared to over three million people that are in the state of Arkansas.”
Perrin says the lack of enforcing collection of the tax has led to the state losing a lot of money.
“The conservative amount is that the state loses at least $25 million a year in lost online sales taxes, but we know it is actually much more than that.”
Alderman Bobby Long is against the legislation.
“I support local businesses and shop local whenever I can,” Long says. “What I can’t support is using this as a way of adding to the state’s revenue. It is not acceptable to give big government more money to spend through saying this would benefit local businesses.”
He also tells what his other concern is about the legislation.
“There is nothing that can prevent a Jonesboro business from setting up a website and selling their goods across the country to make online profits, just like other businesses are doing in Arkansas. I go back to the fear of using this legislation as a way of getting as much money as they can from taxpayers in the state.”
Jonesboro Mayor Harold Perrin said that Arkansas has not been enforcing the law of collecting internet sales taxes. He says the lack of paying those taxes is “tax evasion”. He says it is not fair that local businesses that support activities that take place in Jonesboro are not supported when online retailers are supported due to “convenience factors” for shoppers.
The Arkansas Municipal League needs to collect at least 300 resolutions from cities around the state before they request a special session from Governor Hutchinson.