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.
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."