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Lawmakers frustrated over timing of tax changes Saturday, Jan 19, 2008 By Rob Moritz Arkansas News Bureau LITTLE ROCK - State finance officials had to answer to lawmakers again Friday for delays in getting information about the new changes to Arkansas' sales and use tax law to businesses around the state. "We did failed in getting out information in a manner that (business owners) could get ready by Jan. 1," Tom Atchley, excise tax administrator for the state Department of Finance and Administration, told members of the Legislative Council. In December, DF&A Director Richard Weiss apologized to the panel for delays in getting information to business owners about the new rules that affect purchases from Arkansas businesses that are delivered. Known as the "streamline sales tax," the rules require businesses to collect city and county sales tax at the rate where the items are delivered, not at the tax rate where the business is located. "I've had more calls on this item than I ever received out campaigning, being elected or anything else," Rep. Barry Hyde, D-North Little Rock, complained Friday. DF&A officials told lawmakers the information has been mailed to business owners and is available on the Internet. DF&A Deputy Director Tim Leathers also said state auditors will go easy on small businesses this year when checking compliance with the new law. The change is a result of the state's participation in the Streamlined Sales and Use Tax Agreement, which standardizes sales tax collection rules across the country. Arkansas and more than 30 other states are participating in the project to streamline tax codes for vendors to be able to tax online and mail-order purchases when the retailer is located outside the buyer's home state. Once the states make tax codes more streamline, Congress is expected to enact federal law allowing states to begin taxing Internet sales. Congress is expected to take up the issue this year, Leathers said. Many out-of-state businesses began voluntarily paying under the new tax law last year. The state received about $7 million in additional revenue, Leathers said. With the new tax law, which went into effect Jan. 1, Arkansas expects to receive as much as $10 million in additional revenue this year and could see an additional $100 million annually after Congress approves taxing Internet purchases, he said. Hyde said many small businesses are struggling with the new law and he mentioned a small print shop in his district that is sending flyers to 100 different businesses across the state. Under the new law, the business must figure the local sales tax where each delivery is made, rather that the tax in its city or county, he said. "It's very tedious," he said, suggesting that maybe the state delay implementation of the law until later this year. Lawmakers took no action Friday. Atchley said computer software that can handle the new tax law is available for businesses, and information on the software will be provided by DF&A. "We've been working on this since 2001," said Sen. Jim Hill, D-Nashville. "We never thought it would be easy." Hill and Rep. Johnny Key, R-Mount Home, asked DF&A officials to write down all the questions they receive from the public, answer them and then e-mail the information to lawmakers. "It sure would help these guys with there little worst-case scenario questions," Hill said. |
