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City Passes Resolution Supporting Internet Sales Tax


Mena City Council passed Resolution 1339 on Tuesday, July 11, 2017 at their regular monthly meeting. The resolution supports proposed federal and state legislation to insure the proper assessment and collection of sales tax from all internet and online sales, no matter where that business is located.  The Arkansas Municipal League asked each city in the state to pass a similar resolution and to send it to Arkansas Governor Asa Hutchinson to encourage him to call a special session for legislators to vote on the matter.

A piece of legislation was sent through the Arkansas legislature this spring, dubbed SB 140. That bill was shot down in the House.

Mena Mayor George McKee, along with many other municipalities, feel that internet sales have decreased local collections, causing decreasing budgets across the country. As consumers make more and more online purchases, cities and counties take deeper cuts. “Our revenue is dropping; this will help,” he said. Mayor McKee gave an example of how this could affect a community. “Waldron has lost their Walmart, and along with that, the sales tax from that business. With a law like this, Waldron residents could order online from Walmart and the city will still be able to gain the sales tax from the purchase.”

In October of 2016, The Pulse spoke with Polk County Judge Brandon Ellison about the effect internet sales have had on county tax collections. Currently, the county is $13,740.62, behind in sales tax collections from this same time last year. At the time, Ellison speculated that internet sales could be a contributing factor on the decline of collections. He stated, “We encourage people to spend money at home. Internet sales are not taxed. It has certainly taken off and people buy a lot of stuff online and it’s really unfair to brick and mortar businesses at the local level. They’ve taken the risk and made the investment and they are having to collect state, county, and local taxes while the internet sales don’t. I think it is probably affecting more rural Arkansas counties also.”

Just months later, legislators would consider this very factor. is ahead of the game when it comes to the concept. The large online retailer made it their own policy to begin collecting local and state sales taxes. Mena received their first payment from Amazon in May. Although it is not yet a significant number, legislation could increase it drastically.

One comment

  1. What wise Grover said in 2011 still applies today, tax spenders or no tax spenders…

    “March 9, 2011

    Arkansas State Senate

    Dear Members of the Arkansas Senate,

    I write in strong opposition to establishing an affiliate nexus Internet tax in Arkansas
    under Senate Bill 738. The bill’s intent is to require out-of-state retailers to collect and remit
    sales tax on products purchased online by residents. However, the realistic outcome of this
    legislation will do more to negatively impact in-state businesses than it will to level the playing

    Current jurisprudence, under the Supreme Court’s ruling in Quill v. North Dakota, requires a
    business to have a physical presence in a state in order for the state to compel that business to
    collect sales taxes. SB 738 attempts to circumvent this law and require out-of-state retailers to
    collect tax by presuming a company has a presence if 1) business is solicited through a third party
    affiliate in the state, or 2) it is part of a “controlled group of corporations” with another one based the state. This bill flies in the face of the Supreme Court’s ruling and could bring a lawsuit to Arkansas at a time when the same tax is already undergoing legal challenge in New York.

    Senate Bill 738 could inadvertently punish Arkansas advertisers and other businesses.
    This tax expands the definition of doing business to include an out-of-state retailer that has an
    affiliate in Arkansas. If having an affiliate in Arkansas creates a nexus for out-of-state retailers,
    these retailers will likely terminate advertising or other agreements with Arkansas businesses.
    This is precisely what has happened when similar legislation passed in other states, such as
    Rhode Island and North Carolina.

    If online retailers sever nexus to avoid the tax change, the state will not raise revenue. In
    fact, should this bill pass and online retailers sever contracts, 1,800 advertising affiliates in
    Arkansas will lose business and the state will lose the $9 million in state income tax that these
    affiliates pay.

    There are two potential outcomes. If SB 738 is scored assuming no online retailer severs their
    in-state ties, the bill will be a tax increase that raises revenue and Americans for Tax Reform
    considers it a violation of the Taxpayer Protection Pledge. If SB 738 is scored to not raise
    revenue, it assumes out-of-state retailers will sever their ties with Arkansas businesses, causing
    them and the state to lose revenue without leveling the playing field between brick-and-mortar
    and online retailers. This is no contradiction – it simply depends on how economic actors react
    to the tax change. Regardless, both of these outcomes make for bad tax policy, and the more
    likely outcome makes the intent of this legislation – leveling the playing field – irrelevant.

    For these reasons, the affiliate nexus Internet tax has been rightly rejected in at least 14 other
    states. We urge you to reject Senate Bill 738.

    Grover Norquist”

    PS: There already is an Arkansas sales tax on the internet. It is called the ARKANSAS SALES TAX. It is now collected in-state for point of delivery calculation (a burdensome and frankly stupid policy, where all applicable sales should be taxed at the point of origin/transfer of ownership, as was previously done and for decades) — or you write-in and pay annually what you didn’t pay otherwise and still owe. The simple solution of course would be a single rate National Sales Tax — but that would put too many bureaucrats and other career anti-productivity parasites back into the actual working world. Not that there’s anything wrong with parasites. Just misguided and uninformed politicians that feed them.

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