Columnist 

State’s Republican congressmen push Internet tax bill


Forget the fiscal cliff. Despite all the debate among our top lawmakers and the subsequent media coverage, Americans aren’t nearly as worried about that issue as some others that affect them personally.

Take the potential loss of the Twinkies industry, for example. As of Monday 4,264 U.S. citizens had signed an online White House petition calling on President Barack Obama to nationalize the Twinkie industry, threatened by the bankruptcy and shutdown of the Hostess Brands company.

I prefer the cream-filled chocolate Hostess cupcakes myself, but I’d hate to see Twinkies disappear, too.

This petition is one of nearly 300 posted on the White House Web site (https://petitions.whitehouse.gov) through its new We the People program. Another one calls for the president and Congress to reach a compromise preventing the so-called fiscal cliff, but only 650 people have signed it.

However, even the Twinkie petition is far short of the 25,000-signature goal set for the issue by Dec. 16. So if you love Twinkies, you should go to the site and sign on.

Meanwhile, another year-end issue with some personal impact is attracting some attention in competition with the fiscal cliff thing. That would be the push for expanding Internet sales tax applications, and one of the main proponents is none other than Arkansas 3rd District Rep. Steve Womack, R-Rogers.

Womack is the principal sponsor of House Resolution 3179, also known as the Marketplace Equity Act. Among the 56 co-sponsors are 1st District Rep. Rick Crawford, R-Jonesboro, and 2nd District Rep. Tim Griffin, R-Little Rock.

The legislation would authorize every state to require all retail sellers making remote sales to collect and remit sales and use taxes on items they sell to consumers within the state, regardless of the location of the seller or whether it otherwise does business in the state.

Now why, you might ask, would Arkansas’ three Republican congressmen be in favor of a new Internet tax?

They would argue that this isn’t a new tax, that consumers are already required in the states to pay sales and use taxes on most goods they purchase. But in a 1992 case the U.S. Supreme Court ruled that it would be “too heavy a burden” for a retailer to collect taxes on all the sales they make in as many as 50 states, thereby leaving it to consumers to pay the taxes on their own.

Quick, how much of the Internet tax on your Christmas purchases have you remitted to the Arkansas Department of Finance and Administration so far?

The court decision actually made a strange distinction. If a retailer has a presence in the state, i.e., retail stores, it must collect sales and use taxes on Internet purchases. Otherwise, it does not. (When these taxes are collected, usually the collections are limited to the state tax and not local taxes. I don’t see anything to indicate that would be changed under HR 3179.)

The result is that we have such major Internet-only companies as Amazon.com and eBay.com selling their goods without collecting any sales taxes or bothering with paying the states due them. But other companies like Best Buy, Target and Wal-Mart, which sell a lot of stuff online as well as in their stores, must collect and pay all applicable sales taxes.

That gives the Internet-only companies an advantage of selling their goods at least 6 percent below the total price of companies that do business within the state as well as online. While most of us probably don’t pay much attention to the add-on charges like sales tax and those outrageous “shipping and handling” fees,” that can be a significant difference.

The people who run Wal-Mart think so, and executives at many other companies and business organizations such as the International Council of Shopping Centers agree. Wal-Mart’s headquarters just happens to be in the middle of Womack’s district, which could explain why he and the other Arkansas Republicans are willing to risk the wrath of Grover Norquist, the founder of the Americans for Tax Reform and author of the no new taxes pledge.

For the record, Norquist said the Internet tax bill is unacceptable . He doesn’t have to worry about campaign contributions.

An Arkansas Democrat-Gazette story Monday quoted Womack as saying he has a “bull’s-eye” on his back among some of his fellow Republicans because of the legislation. But he’s billing HR 3179 as a states’ rights issue, simply giving the states’ power to enforce the laws they’ve already passed.

It’s also a fairness issue. We should not put businesses that operate in our local communities at a disadvantage in competing against other companies. Their local presence means jobs and money circulating locally. That’s the situation we have now, though.

There also a is competing bill — the Main Street Fairness Act — but its scope is more limited.

Womack may not have a chance of passing his bill in the yearend rush, and it would have to be re-introduced in the new Congress next year, but its time has come. The lack of technology to collect and remit the taxes is no longer an issue.

———-

Roy Ockert is editor emeritus of The Jonesboro Sun. He may be reached by e-mail at royo@suddenlink.net.