Amazon would be required to tell Arkansas customers they owe the state sales tax under a bill approved by the House Tuesday, one of two efforts by lawmakers to recover millions in tax revenue from the e-commerce giant.
The bill approved by the House on a 54-46 vote would also require Amazon and other out-of-state companies without a physical presence in Arkansas to provide a list to finance officials of purchases made by state residents. The measure now heads to the Senate, which a day earlier approved another measure that would require Amazon and similar companies to begin collecting state sales tax.
Arkansas is one of a handful of states where Amazon doesn’t have a distribution center or office and doesn’t collect sales taxes.
“Main Street in Arkansas today is bleeding, and they’re bleeding because they’re at a disadvantage to the online retailers who have chosen to do business in this state,” Republican Rep. Dan Douglas said before the vote.
To avoid collecting taxes, Amazon has historically relied on another high court ruling that predates the era of online shopping. That 1992 decision bans states from forcing out-of-state retailers to collect taxes if they don’t have a physical presence in the state. Douglas’ bill is modeled after a Colorado law that the U.S. Supreme Court let stand last year.
Amazon declined to comment on the House measure. The efforts to recover money from the company have the backing of Bentonville-based Wal-Mart, but are opposed by conservative groups such as Americans for Tax Reform. Opponents have said the move would increase the tax burden on the state’s residents.
“When you put this on their back, they are going to feel it,” Republican Rep. Bob Ballinger said before the vote.
Douglas and other supporters of the proposals have said the tax revenue from Amazon could help pay for additional income tax cuts. Republican Gov. Asa Hutchinson last week signed legislation cutting income taxes by $50 million and forming a task force to recommend deeper reductions before the 2019 session.
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