Council supports online sales tax

Friday, August 4, 2017

The Berryville City Council is attempting to level the playing field for local merchants by supporting the enforcement of the sales tax on all Internet and online sales.

The council voted at its Tuesday meeting to pass Resolution 1018, which supports federal and state legislation to ensure the proper assessment and collection of sales tax from all Internet and online sales to create a fair market for all businesses and consumers regardless of the location of the business from which the purchase was made.

City attorney Clint Scheel read the resolution, which states that the city of Berryville recognizes that legislation referred to as the “Marketplace Fairness and Remote Transactions Parity Act” is being considered by Congress and similar legislation was considered by the Arkansas General Assembly during the 2017 regular legislative session as Senate Bill 140 of 2017.

This legislation would give states the authority to enforce local and state taxes that are already in place and owed by out-of-state online sales, the resolution says, and would require retailers to collect and remit sales tax to state and local governments for out-of-state sees.

It says all businesses, regardless of their physical location, should be required to collect and remit state and local sales tax because the playing filed, as it currently stands, favors out-of-state Internet retailers that exploit a pre-Internet loophole, allowing them to evade collecting state and local sales tax even though they sell the same products in the same communities as local merchants do.

As it currently stands, the resolution says, stores with a local retailer must collect sales tax while online stores do not, enabling online stores to undercut local retail prices.

This legislation is not a new tax or a tax increase, it says, but rather enables states to collect taxes that are already due and would generate more sales, pay more sales tax to the state treasury, encourage more local retailers to maintain or expand their presence, create jobs for local workers and infuse more money into local economies throughout the state of Arkansas.

The city of Berryville urges members of the Arkansas Congressional Delegation and the Arkansas Legislature to work for passage and vote in favor of legislation requiring the collection and remittance of state and local sales tax by all retailers, the resolution says, making for competition in a true free market and giving every business an equal opportunity to compete, innovate and create jobs.

The resolution says the Berryville City Council also urges Gov. Asa Hutchinson to call for a special session as quickly as possible to address this issue for the benefit of the state’s local retail business and its citizens.

Mayor Tim McKinney said many cities around the state are passing similar resolutions.

“Congressman Steve Womack and some others are on board with this legislation, and others aren’t,” he said. “This is a resolution encouraging the federal and state levels to complete this legislation.”

Currently, McKinney said, the lack of sales tax on Internet and online sales is costing cities around the state a great deal of revenue.

“For one business in Berryville, it’s costing us over $20,000 a year,” he said, “and that’s one business. A lot of people try to portray this as a new tax, but it’s not. What this is doing is balancing that out to make everybody on the same playing field.”

If the issue is not addressed, McKinney said, the long-term consequence is that cities will keep losing revenue and will have to raise taxes in other areas.

“They’re going to have to raise taxes somewhere else,” he said. “Police cars don’t run on air, and streets aren’t cheap. We will send a copy of this resolution to our congressional delegation and the governor’s office. It urges the people who can do something to do something.”

Also at the meeting, Jeff Hatley, mobility manager and public information officer for Ozark Regional Transit Authority, gave the council a report on the service’s activity in Berryville from January through June.

“Ridership is down quite a bit this year,” he said. “We had that major fire back in January that destroyed 80 percent of our fixed route fleet, which was about 20 buses. We’ve been slowly recovering from that, replacing buses and getting buses leased and loaned.”

Over the past few weeks, Hatley said ridership has slowly increased to the average ridership of 2016 on three different days.

“We usually average 1,100 and 1,300 rides a day, and, on those three particular days, we were back above the average again,” he said. “It’s a minor milestone, but it is a milestone to get back to where we were.”

In Berryville, he said Ozark Regional Transit Authority had 219 rides in June, eight of which were passengers in wheelchairs.

“For the year so far from January to June in 2017, we’re actually down a little bit,” Hatley said. “We had 998 picked up in 2016 up to this point and only 776 so far this year. I don’t know what the explanation is for that. We can’t blame that on the fire since it didn’t affect over here.”

He said the service has also changed its policy to allow veterans to ride the fixed route system for free as a way of giving back. Three new vehicles were also purchased, he said, totally separate from the fire recovery effort.

“These are going to be strictly for rural use, which includes Berryville,” Hatley said. “We’ve got three vehicles. One is going to be primarily Washington County. One will be Benton County, and one will be Carroll County. So we will have a small 16-passenger bus over here. It’s brand new.”

The council’s next regular meeting is scheduled for 6 p.m. Tuesday, Aug. 15, at City Hall.

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