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Boozman says Internet tax bill could pass U.S. Senate by end of 2014

A tax reform issue and a stronger infrastructure bill await Congress when it returns from its summer recess early next month, U.S. Sen. John Boozman, R-Ark., told the state’s mayors Thursday (Aug. 21).

Boozman spoke to about 50 mayors during the Arkansas Municipal League Executive Committee meeting at the Hilton Garden Inn in Jonesboro.

The tax issue is the so-called Marketplace Fairness Act, which would help cities and counties collect sales taxes from online purchases, officials said at the meeting. Boozman said the issue is multi-faceted.

“The issue is critical to cities, but also to small business,” Boozman said.

Boozman noted that the average sales tax in Arkansas is nine percent, with the compliance time for businesses dealing with the tax even more frustrating. He said that a test vote in the Senate earlier this year on the bill during a so-called “Vote-a-Rama’ session was successful.

The bill would likely be brought up in a lame-duck session of Congress, after the November general election, Boozman said. The bill would also likely be tied to a continuation of a ban on Internet taxes that is working its way through the House.

Boozman took a question from Little Rock Mayor Mark Stodola, about the Internet tax bill’s future in the House. The bill would likely be subject to strategy and compromise as legislators look at the bill, Boozman said. After the presentation, Boozman sat down with Talk Business and Politics to discuss the issue.

He said technology has changed a lot of the dynamic in everyday life, even in commerce.

“Both (Marketplace Fairness and the Internet tax ban) are important. If you would have asked me 10 years ago, I would have said no because the Internet was in its infancy,” Boozman said. “But the trend is great. But as it has developed, we have had a whole generation raised on the Internet. There must be a cost comparison and competition, but it also must be fair.”

Earlier this week, opponents of the Marketplace Fairness Act — the National Taxpayers Union and R Street Consultants — released poll results from Arkansans on the issue.
The polling firm, Mercury Polling, surveyed 400 likely Arkansas voters on June 1-2, 2014, and found that only 28% supported a measure to make online retailers collect sales taxes on Internet purchases, while 59% opposed.

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The U.S. House version of the bill has been pushed by U.S. Rep. Steve Womack, R-Rogers. Womack said in a June 2013 interview with The City Wire that his bill is not a new tax.

"If this bill passes, it has no affect on people whatsoever until a state takes action," he said. "It doesn't raise any revenue, it doesn't raise a red penny. It just empowers the states to collect the taxes that are due that have been legally implemented."

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Boozman & Womack Want More Taxation

Does this mean Sen Boozman, like Rep Womack want to keep growing the size of government at the expense of the private sector? According to the above poll from Mercury Polling, who surveyed 400 likely Arkansas voters on June 1-2, 2014, found that only 28% supported a measure to make online retailers collect sales taxes on Internet purchases, while 59% opposed. Is this the same as Taxation without Representation?

Nowhere To Hide

A tax on anybody is a tax on EVERYBODY because eventually the tax finds its way to YOU!

It is a new tax

Sorry Representative Womack, it is a new tax if is not a currently collected tax. Just as George H.W. Bush was berated and subsequently defeated in his re-election bid for enacting new taxes while claiming they were not new, my hope is that Arkansas citizens will do the same for Rep. Womack and Senator Boozman. It is obvious that they know this is extremely unpopular, as evidenced by the polling numbers and the fact that they want this vote to be AFTER the election. They are responding to pressure from Wal-Mart, but they should remember that they represent all of our citizens, not just the ones making big contributions to their re-election campaigns.

Not surprised

Have to admit I'm surprised at Boozman supporting increased taxes but not at Womack. He has been in Wally World's back pocket from day one. I wonder if either of them would agree to stopping the sales tax all together. That would give these anti-internet complainers an even footing too!

Horrible Idea!!

Proponents of this bill say it will be easy. REALLY? Have they ever tried to integrate tax software into a customized shopping cart? LOL!! Like “OBAMACARE“ easy? Even if we take them at their word "only one state tax rate" and "perfect running software to calculate", HOW DO PAYMENTS GET REMITTED to all 46 states? Do we write 46 monthly checks? Fill out 46 separate monthly sales tax returns? NO ONE CAN HONESTLY ANSWER THIS QUESTION BECAUSE THEY DID NOT STUDY THE APPLICATION OF THIS LEGISLATION BEFORE RUSHING IT THROUGH THE SENATE. Not all small merchants are order automated and to input additional information by hand is both time consuming and interferes with normal business operations. What about audit risk? Can the tax board in Tennessee come after a merchant in Florida? Is it moral to burden an out of state merchant to collect taxes on behalf of a state they don't live or work or vote in? Why not ask China or Mexico to collect Tennessee taxes? Is this constitutional? Will surely be challenged in the courts, but why this legislation is truly harmful is that in such a weak recovery (check labor participation rate, wage growth, hours worked, etc.) you are burdening the very small businesses that are one of the only sources of growth in our economy. Hiring in this sector will freeze or decline and companies that are mobile and of large enough scale will simply move offshore. Our tax code is already written in a manner that encourages large companies to domicile offshore, this legislation encourages the medium and even portable smaller sized USA businesses to join them in order to compete with websites that won't have to collect this tax in the Caribbean, Mexico, Canada, etc. The tax revenue collected will come right out of the pockets of the average American family and the extra $$$ our citizens will have to pay means LESS money in their pockets to spend locally. In terms of "Fairness", there is zero entry barrier for any brick and mortar retailer to sell their products online. HOW ABOUT AN OPT OUT OPTION? We agree not to ship to states that want us to collect sales tax and then we are not forced to multiple file and take the audit risk? One million dollars of revenue does not make you a big business.......at a 5% profit (small margins are common online) you are making a whopping $50K of gross profit annually......this will ensnare and burden a TON of small businesses if passed in its current configuration.

It is called a use tax.....

Under the current law if you as an individual buy something from out of state, which are generally "tax fee" you are supposed to voluntarily pay the amount you would have paid to a brick and mortar store and it is now called a use tax. However we know that know one does that. As a business owner who collects sales tax I get the "honor" of allowing the state tax people to audit all of my purchases. I now get dinged on my out of state purposes. Can you imagine the outrage if the state tax agencies started going after individuals for out of state purchases? So rather than enforce an existing law they create a new law and go after businesses, cost and complexity be damned. The local and state govt's need all of the money they can get their hands on to feed the ever growing do nothing growth in government. This needs to stop now as it will only get more intrusive.

Oh No Not Another Tax Plan To Help Us

We are all weary of new tax schemes by the people that we elect to pick our pockets. Its hard to decide who is more dangerous to the community, your business, or your family, the armed robber or the people promoting new taxes.

Once means forever with all forms of taxation

in case any here haven't noticed. Whether it be a vehicle safety inspection, county appraisals that don't go down and cut into their money even in a recession, millage rate increases, sales taxes which are merely feigned to be lowered, utility bill add-ons to the absolute max. Perhaps we shouldn't take it so lightly when the next new wonderful reason to relieve us of a little more chance to thrive or even survive is all set to be handed over to them.