New York City -- The Arkansas Senate voted Thursday to require many out-of-state online retailers to collect sales taxes the same way in-state stores do, a move that is pitting Wal-Mart Stores against online stores and anti-tax activists, the Associated Press reported.
The bill would require out-of-state online retailers to collect Arkansas sales taxes if their annual sales in the state exceed $10,000. The measure would apply to retailers that have online affiliates in Arkansas, who directly or indirectly refer customers for a commission or some other consideration.
Under current law, customers are required to pay state sales taxes on items they buy online but the burden is on them to report and pay the taxes to the state.
State officials say the change would have a minimal financial benefit to the state, and said it would depend on the response of online retailers such as Amazon.com. When similar legislation was enacted in Rhode Island and North Carolina, Amazon ended its affiliate program so it could continue selling in the states. A spokesman for Amazon did not respond to a request for comment Thursday.
One of the biggest backers of the proposal is Wal-Mart Stores, which said the legislation would level the playing field between retailers and online businesses, according to the report.
The proposed change faces heavy opposition from the anti-tax group Americans for Tax Reform.