The Arkadelphia City Board of Directors voted 5-2 to endorse a letter supporting the Marketplace Fairness and Remote Transactions Parity Acts during their Tuesday meeting.

The Arkadelphia City Board of Directors voted 5-2 to endorse a letter supporting the Marketplace Fairness and Remote Transactions Parity Acts during their Tuesday meeting.
Director-at-Large Julie Winfrey and Ward 5 Director David Rider voted against sending the letters to Arkansas’ six congressional members asking for their support of the Act. The letters have been addressed and sent to Sen. Tom Cotton, Sen. John Boozman, Rep. Bruce Westerman, Rep. French Hill, Rep. Rick Crawford and Rep. Steve Womack.
The letter basically states the city board’s support of the measure that is being considered by the United States Congress.
During their Dec. 6 meeting, Arkadelphia Mayor James Calhoun asked for the item to be placed on the agenda for Tuesday’s meeting.
According to Calhoun, Boozman, Crawford and Womack have publicly stated their support for the Act, while Cotton, Westerman and Hill are not on board with the idea.
“Concerning the Marketplace Fairness Act, the National Congress has been looking at this,” Calhoun said.
Calhoun explained that if a business currently has a local presence in a state, then they must collect that state’s sales tax, along with sales tax revenue from the county and the city.
“If you order online from Walmart, Sears, Dillards - then your sales tax is added to it. However, if they do not have a local presence, they do not have to collect the sales tax. But you are required by law to report it on your state income tax,” Calhoun said.
According to Calhoun, the number of people who actually report is low.
“Our city does,” said Calhoun, who added that City Treasurer Jennifer Story has to make occasional online purchases for the city.
“Our treasurer makes sure the sales tax is paid. The auditors will catch her and tell her that she should have paid them,” said Calhoun.
The mayor stated the city could increase its revenue by 10 percent, if the tax was reported and collected.
“The mayor of the City of Little Rock said that for Little Rock it would mean $2-million a year. It is really hurting them. I think it’s hurting our budget,” Calhoun said.
In addition to providing the city with the extra revenue, Calhoun said the Act would provide fair competition for local merchants.
“If I walk into Sears and I find an appliance that I can order online, and if I order it from Amazon or somewhere and don’t pay the sales tax on it, then I’m able to get it and nine-and-a-half percent cheaper than our merchant can sale it. Even though the price may be the same, the sales tax isn’t,” Calhoun said.
According to Calhoun, the State of Arkansas and other cities across the state have sent letters to endorse the Act.
While he does not have a lot of online competition, Ward 3 Director Scott Byrd said he has a lot of friends who do.
“I was talking to a major motorcycle vendor in Little Rock this weekend. A lot of his stuff is not cheap. It is not unusual to spend $10,000 on parts and you are looking at a nine-percent discount from ordering it online that puts him at a distinct disadvantage right off the bat,” said Byrd.
As a business person, Byrd said not being able to collect the revenue makes a difference.
“As a taxpayer, sure, I’d love to get around any taxes that I could, but this is only fair. People are basically getting through a legal loophole and I would like to see it tightened up a little bit, but it is going to have to come from the national level,” said Byrd.
With the acquisition of the new Shandong Sun Paper plant, Assistant Mayor Dick Rudolph said the city is going to need additional funds to address the issue regarding the high volume of truck traffic.
“We’re going to need some money to cooperate with the State of Arkansas,” said Rudolph.
While he agreed with the overall concept of what the Act seeks to accomplish, Rider said he could not support the Remote Transactions Parity Act.
“There are some things in there that I do not agree. These are two different deals,” said Rider, who added that based on his research, the Marketplace Fairness Act sounds better to him.
While this legislation is not a new tax or a tax increase, Calhoun said it enables states to collect taxes that are already due.
In addition, Calhoun believes the Act will encourage more local retailers, which will create jobs for local workers and infused more money into local economies throughout the State of Arkansas.