STEVE WOMACK, a congressman from Arkansas, knows how business is done in this state—or rather not done. For his background includes experience at just about every level of local, regional, state and federal government. And he’s ready to have this state compete with all the others in a fair fight for taxpayer—and consumer—dollars. But right now the game is rigged in favor of special interests, namely online businesses. Because merchants in this state have to compete against those in others that are able to sell their goods and services effectively tax-free.
Folks who buy things online are costing local and state merchants a fortune. Quick, the Remote Transactions Parity Act to the rescue! It may not have passed in previous sessions of Congress, but try and try again. Which is what a grand alliance of Arkansas’ retailers and politicians now propose. Their impressive number includes Gov. Asa Hutchinson along with Wal-Mart, Target and the Arkansas Grocers and Retail Merchants Association—a grand alliance in favor of simple justice.
To quote J. Craig Shearman of the National Retail Federation, “The situation right now is absolutely not working, and the law absolutely needs to be changed.” Now if not before.
“In my strong opinion,” adds Congressman Womack, “we are doing significant damage to the retail community that forms the backbone of a lot of the income stream for Arkansas cities and counties and our state, and we are doing a lot of corresponding damage to a lot of our local governments.” We like strong opinions in this shop. Why have weak ones?
Let’s leave it to somebody like Grover Norquist of Americans for Tax Reform, which might be better named Americans for Tax Deform, to confuse a tax that hasn’t been collected with a “new one” in an attempt to mislead the poor (or rich) American taxpayer: “They want to change the law to get more money in the hands of the government,” he says. “I think if you explain that to any citizen, they say, ‘Oh, you mean a tax increase.’”
No, we’d imagine that most thinking people can tell the difference between a tax increase, and a tax that’s been avoided over the years by online retailers.
“I’ll tell you straight up,” Congressman Womack is candid enough to say, “this situation is not going to get better. It’s going to get worse, and we’re seeing signs of it getting worse.” His well-based opinion is echoed by Little Rock mayor Mark Stodola, who adds: “For quite some time we all, on a local level, have realized that this is only going to escalate each year, [with] more and more people purchasing online.”
Happily, says Mayor Stodola, Arkansas has a congressman like Steve Womack, who’s been “a big champion” of local government. “Steve, having been a mayor, understands how critical [collecting this tax] is to local government. I mean, we are largely dependent on our sales tax for our revenue stream.”
That opinion is echoed by some of the state’s best, brightest and most senior leaders. “It’s a matter of fairness,” says senior U.S. Sen. John Boozman, who notes that businesses online don’t have to collect the 9.5-percent sales tax due Arkansas governments, and so enjoy a great—and unfair—advantage over retailers within the state’s borders. “If you start out 9.5 percent behind,” he notes, “it’s very difficult to make that up. If we’re going to continue to have small businesses on Main Street, then we’re going to have to do something.” Like right now if not before.
Tom Cotton, the junior senator from Arkansas and great hope of his national party, puts it like this: “Some of the disagreement in Congress has been about how you frame that legislation so you don’t open up small business in Arkansas to the tax laws of 49 other states and potentially hundreds of jurisdictions when you include counties and cities and special-purpose jurisdictions like school districts and water boards. But we need to make sure that taxes due are paid, collected, administrated in a fair, efficient manner. That’s what should happen, and that’s what I hope will happen.”
Rick Crawford, another congressman from Arkansas, points out that the subject under discussion “is not a new tax. It’s a tax that, up to this point, has really just never been collected.”
MAX BEHLKE of the National Conference of State Legislatures points out that for “every state that has a sales tax, this is a very big issue.” It shouldn’t be. Just pay this tax too long overdue and have done with it. Besides, if the states don’t get the revenue they’re owed from these sales taxes, they’ll just have to cut existing programs or raise the money to pay for them some other possibly more painful way. “After the recession,” notes Mr. Behlke, “states cut so much out of their budgets that there really isn’t a whole lot left there to cut, so coming to a resolution to this issue, it’s more important now than it’s ever been.”
And the longer that resolution is further delayed, the more pressing or at least more irritating this issue will become. Why not just do right and do it now?
Print Headline: Level the playing field