TIMELY > TOPIC


Streamlined sales tax effort stalls – at least for now


By Roby Brock Special to County Lines


my, political conditions, and internal riffs in the retail arena. Tree years ago, passage of a streamlined sales tax (SST) system was imminent. Today, no one holds much hope for a quick resolution even though there is a bill pending before the current Congress. "We don't really think that it has a good chance of passing anytime soon," said Tim Leathers, Deputy Direc- tor of the Arkansas Department of Finance and Administration. Te Streamlined Sales Tax Project


D


started earlier this decade as a na- tional guideline group working to make more uniform state and fed- eral laws for the collection of sales and use taxes from purchases made across state lines. Specifically, mem- bers of the group aimed to collect those taxes from "remote" sources, such as items bought over the In- ternet and from mail orders, phone orders and catalog sales. Supporters argued that Main Street busi- nesses have to collect and remit the taxes, but "remote" sources did not, which gave them an inherent business advantage over bricks-and- mortar competitors while costing state and local governments billions of dollars in lost revenues. A Congressional estimate of the amount of lost sales tax revenue created by this inequity is staggering. According to Congressional re- search, approximately $18.6 billion in sales and use taxes from "remote" sources will go uncol- lected by U.S. states in 2011. By 2012, states will be losing at least $23 billion annually. For the three-year period of 2009-2012, esti-


mates are that states will miss out on nearly $55 billion in lost sales tax revenue. Arkansas passed state laws in 2007 to gain


34


espite promising potential, ef- forts to implement a national streamlined sales tax initiative have dragged due to the econo-


compliance with the SST Project in anticipa- tion of federal guidelines, but Congress never made its move. In late 2007, all odds pointed to passage of a


proposal sponsored by Sen. Mike Enzi (R-Wyo- ming). His bill stalled as other priorities domi- nated the agenda. Lawmakers then became dis- tracted by the downturn in the economy, which ultimately led to the worst recession since the Great Depression. Tis year, Cong. William Delahunt (D-


Massachusetts) has introduced a reincarnation of Enzi's bill. Te "Main Street Fairness Act" would set up the federal guidelines for states to participate in a voluntary SST agreement.


Te Computer and Communications Indus-


try Association, which represents companies like eBay, Yahoo!, Google and Microsoft, con- tends it would be an e-commerce killer. But Delahunt announced he would retire


this year, and with time running out on his term, chances of the measure passing are slim. DF&A Deputy Director Leathers shares


Delahunt's philosophy that with the struggling economy, its a good time for legislators to seek the lost sales and use tax revenues that the SST initiative would enact. "But with the perception that this would be a


tax increase, the political will is really not there," Leathers noted.


He also points out that an Approximately $18.6 billion in sales


and use taxes from “remote” sources will go uncollected by U.S. states in 2011. By 2012, states will be losing at least $23 billion annually.


"We are facing unprecedented economic times and difficult choices. State officials are now coming to Congress looking for billions for their schools, teachers and other vital public programs. However, our first priority ought to be to help states collect the billions in tax rev- enues that are already owed, but are being lost," said Delahunt when he filed the bill in July. "Instead of raising new sales taxes - let’s col- lect these tax dollars first," he added. A number of organizations have signaled their support for the legislation, including the National Association of Counties, National Re- tail Federation, International Council of Shop- ping Centers, National Governors Associa- tion, U.S. Conference of Mayors, the National Conference of State Legislatures, and National League of Cities.


agreement with major retailers - which are being squeezed by online competitors not remitting local and state tax collections - fell victim to internal back-biting. During the past three years, some of those major retail outlets decided they wanted to keep a small percentage of the SST taxes they were collecting - a move that caused dissent and lack of unity among merchant groups. Still, Leathers thinks the day will come when SST finds its


footing. As technology advances make it easier to track and collect sales and use taxes, the abil- ity to enact SST improves. He also says that technological improvements


have led bigger retail operators to voluntarily comply with SST standards and guidelines. Leathers said that Arkansas has had voluntary


participants since it entered the SST network in 2008. Currently, sales and use taxes collected through SST add "about $8 million a year" to the state’s coffers. "It has more than paid for the effort," Leath-


ers said.


Roby Brock is the executive editor of Talk Busi- ness, a television, radio and web site media outlet covering business and politics in Arkansas.


COUNTY LINES, FALL 2010


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60