The Little Rock City Board of Directors has scheduled a vote on a resolution asking for a meeting with the Arkansas congressional delegation, mainly the senators and local U.S. Rep. French Hill, about federal legislation to allow cities to recapture sales tax revenue lost to Internet sales.
The resolution puts it this way in the whereases to justify the meeting:
WHEREAS, the modern digital age has made it possible to make all economies more global in nature, and within a particular company more national, with the use of internet sales, thus contributing to the global economy; and,
WHEREAS, this incredible technological step forward does not always appreciate the discrete aspects of local government law, particularly in Arkansas, and how the first line services to almost all Americans, and definitely all Arkansans, are funded in large part by state, county, and local sales and compensating use taxes; and,
WHEREAS, traditional legal concepts which allow the assessment and collection of these Sales and Compensating Use Taxes are not totally current with existing law, especially for businesses that do a significant number of transactions with the State of Arkansas, but do not collect and remit any such taxes; and,
WHEREAS, it is important that our Congressional Delegation recognize the impact this development has had on the ability of local government to provide basic services, much less the federally imposed but unfunded mandates to meet the special needs of the citizens, and the other services that are necessary for a prosperous and vibrant community;
Internet sales by companies that don’t have physical operations in the state don’t have to collect the sales tax. Online giant Amazon is a prime example, as the illustration above shows. The migration of business to the web has damaged local sales tax collections, the biggest source of municipal money. Little Rock has blamed its lagging sales tax revenues on this factor (though Little Rock also is losing because of the robust growth of suburban cities with shopping outlets that mean residents in places like Benton, Bryant and Conway no longer need to drive to Little Rock to shop.) In theory, people who buy on-line are supposed to voluntarily report the sale and pay a compensating “use” tax. Few do.
Rep. Steve Womack of Rogers has been a leading proponent of legislation to require sales tax collection on online sales. Many Republicans have been resistant.
Cities around the state are passing similar resolutions. In explaining the measure in Arkadelphia, Mayor James Calhou credited Womack, Sen. John Boozman and Rick Crawford support the legislation. But he said Sen. Tom Cotton, and Reps. French Hill of and Bruce Westerman aren’t on board. Hill, who lives in Little Rock, is specifically sought for a meeting with the city directors. Hill, twice elected to congress from the Second District, lost Pulaski County both times, by the way.
Other items of interest on the agenda for the City Board at 6 p.m. Tuesday:
* New backer on Capitol Avenue: A new developer apparently has emerged for the Hall Building at 201-205 Capitol Avenue and wants to reinstate a 2013 proposal for a mixed-use of the property, including 60 apartments. This was a project originally proposed by developer Scott Reed, whose various projects around town have been mired in legal and financial complications. Rock Capital Real Estate LLC says the project still would be for 60 housing units and commercial on the first floor.
* Port park: A proposal by Pulaski County to buy 13 acres from the Little Rock Port Authority and rezone it from industrial for use as a sports complex for College Station, including baseball and football fields. This use in an industrial area apparently isn’t as bothersome to port officials as commercial use of Quapaw Tribe land near the port, which the Port has strenuously opposed. County Judge Barry Hyde, who’s pushing the sports project, has been among those wanting strict restrictions on use of Quapaw land (primarily because of the unspoken opposition to potential use of the property for a casino. The tribe says it’s happy to agree to not build a casino.)
* Lobbyist alley: The city will vote to abandon alley right of way in a block bounded by 2nd, 3rd and Bishop so it can be incorporated into a planned commercial/residential building planned on Bishop by lobbyist Ted Mullenix. This is north across Third from the Capitol and immediately east of the railroad overpass on Third