October 23, 2005--Posted at 2:10 p.m. CST
LITTLE ROCK--Some issues need to be resolved by Arkansas legislators before the state can participate fully in an agreement on collecting sales taxes on purchases its residents make over the
Internet, by mail-order or catalog.
Arkansas officials say that without full participation in the agreement and the passage of federal legislation affecting out-of-state sellers, Arkansas will miss out on an extra 100 million dollars or more a year in state and local sales and use taxes.
The agreement went into effect October First. Thirteen states are full participants. Five states, including Arkansas, are partial participants.
So far, 20 companies have voluntarily registered to collect taxes for Arkansas. The state expects to receive its first tax collections from those companies in November.
Among the issues to be decided before Arkansas participates fully is what the tax rate will be on the Internet purchases made by Arkansans and whether there will be a tax cap on each purchase.
States also are hoping Congress will pass legislation granting them the authority to require remote sellers to collect the tax.