Internet sales tax bill voted down in Arkansas

LITTLE ROCK, AR - Despite pleas from local business and city leaders, lawmakers voted down a proposal to collect sales tax on internet purchases. 

Supporters say the current tax structure is driving local retailers out of business and leaving cities with declining revenues. 

Monday was the last day of the legislative session and there appeared to be momentum to get the internet sales tax bill passed, but opponents flexed their muscles in the State House.

Throughout the session, Arkansas lawmakers were warned about the struggles of brick and mortar retailers. 50 furniture stores in the state closed in the last seven years according to an industry association.

Part of the cause, they say, is unfair competition from online retailers who -- unlike them -- don't charge sales tax. 

City mayors say the shift to online shopping leads to lagging sales tax revenues and budget holes. 

Monday, a bill to force out-of-state online retailers to collect and pass taxes along to Arkansas, went up for a vote in the State House. 

"Are you going to stand for what common sense dictates is the right thing to do to help our state move forward?" St. Rep. Charlie Collins, (R) Fayetteville, asked. 

But opponents call the measure a tax increase that would burden Arkansans. Others say the bill is unconstitutional.

With up to $100 million in yearly state revenue on the line, all eyes we're on the vote tally, which ended up falling several votes short. 

The executive director of the Arkansas Home Furnishing Association said Monday that failure to pass the bill would absolutely lead to more store closures. He promised to continue fighting for a level tax requirement for brick and mortar stores and online retailers. 

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