Wednesday, May 08, 2013

TOP STORY >> Retailers hope Internet sales tax is enacted

Leader senior staff writer

The state and local chambers of commerce — and by inference, apparently their members — seemed unaware or uninterested in the Marketplace Fairness Act, which passed the U.S. Senate 69-27 Monday and is headed to the House Judiciary Committee.

The intent of the bill is twofold: to garner sales tax revenues for states, counties and cities from Internet sales and to level the playing field for local brick-and-mortar stores that must add taxes, which are as high as 10 percent in parts of central Arkansas.

“It’s the best thing that ever happened to us,” said Tommy Dennison, owner of Fort Thompson Sporting Goods in Sherwood, on Tuesday. “It’s a no-brainer.”

He says the current lack of sales tax on Internet purchases is a loophole bought and paid for through lobbyists.

“I sell Swarovski binoculars for about $2,500. I’ll spend half-an-hour with a customer (talking about and demonstrating the binocular), then he orders the same thing on the Internet, with no sales tax, and saves about $250. I’m paying $8,000 a month in health insurance and privilege and sales taxes and they are sitting somewhere in an apartment selling out of a mini-storage unit,” Dennison said.


“I’m doing what I’m supposed to do, collecting tax and reporting it to the state. It’s not fair that I have to do it and they don’t,” said Karen Abrahamson, manager of Double R florist in Jacksonville. “And it’s not fair to the state.”

Dennison said, “The Internet is out of control.”

Collecting those taxes on Internet sales “may hurt Max’s Prairie Wings (in Stuttgart), but it levels the playing field and (helps) our state,” he said.


Abrahamson and Dennison may be strongly in favor of the bill, but other merchants seem less certain about the effect of taxes on Internet sales on their businesses or don’t think it affects them in a meaningful way.

Bill Ryker, owner of M&M Florists in Lonoke, says local taxes already are charged, collected and turned over to the state on orders he gets via the Internet or businesses such as Teleflora.

Tulle is a Sherwood wedding gown and formal business. Owner Lisa Garrett says her customers like the personal attention, especially the fittings. She said many consumers know the dangers of ordering their gowns online —especially those made in China.

“It wouldn’t affect me,” said Deanna Cartwright, owner of the Wish List in Sherwood. “They like the convenience of a small shop with free gift wrap and the experience of shopping.”

“My customers come into my store,” said Paula Ferguson of The Look. “They can try on the dresses — there are so many different sizings and they want to support the community as well as me.”


A study two years ago estimated that Internet tax collections would amount to about $100 million a year for Arkansas, according to Tom Atchley, excise tax administrator for the state Department of Finance and Administration.

“The Marketplace Fairness Act ensures Main Street and online businesses play by the same rules,” Sen. Mark Pryor said Tuesday. “This is something both sides of the aisle support. There’s no excuse for the House to delay on this.”

Sen. John Boozman was one of six Republican co-sponsors of the bill.

While the bill passed easily in the Senate, some House conservatives view the act as a new tax, unwelcome as always. Second Dist. Rep. Tim Griffin — hardly a tax-increase proponent — is a co-sponsor of the bill in the House.

He says he favors the bill because it would give states authority to enforce the law and collect those taxes. It would level the playing field for local brick-and-mortar businesses, he said.

But, “I have advocated from day one that governors and legislators and other state officials tell taxpayers what they will do with the money. I’ve advocated that any additional money that comes in as a result of legislation should be returned to the taxpayer. If politicians want to spend more money, they ought to have to make the case.”

“You don’t hear that side of things but they ought to have that conversation,” Griffin said.

To listen to local chamber directors, their members are not interested in the bill one way or another.


“I have not been following that,” said Jacksonville Chamber of Commerce executive director Amy Mattison. “It’s not something my members have talked about. We don’t have a position. We’re more interested in the effects of sequestration and furloughs at the (Little Rock Air Force) Base.”

Cabot Chamber of Commerce director Billye Everett said she wasn’t aware that the bill being considered in Congress. “We haven’t studied that at this time,” she said.

Sherwood Chamber of Commerce director Marcia Cook said the chamber didn’t have a position on the bill.

The Lonoke Chamber of Commerce didn’t have a position on the bill either, but director John Garner said he was in favor of it.

“I feel the state is due tax on purchases over the Internet,” he said.

A spokesman for the Arkansas Chamber of Commerce wasn’t authorized to speak to a reporter and CEO Randy Zook didn’t return a call.