Arkansas ~ Sales and Use Tax: Amazon Voluntarily Agrees to Collect Tax

CCH Tax Day Report

Arkansas Governor Asa Hutchinson issued a favorable response to Amazon’s announcement that it will begin collecting sales tax in Arkansas beginning in March 2017. Arkansas will join 38 other states in which Amazon is collecting and remitting sales tax. This voluntary step by Amazon comes days after Arkansas lawmakers advanced two bills to require online sellers to begin collecting sales taxes or notifying customers of their tax obligation.

One bill (S.B. 140) would require Amazon and similar out-of-state companies that sells more than $100,000 worth of products or services delivered to Arkansas, or makes at least 200 transactions for product or services delivered to Arkansas in a calendar year, to begin collecting sales taxes. (TAXDAY, 2017/02/09, S.4) The other bill (H.B. 1388) would require Amazon and similar out-of-state sellers to notify every Arkansas customer at the time of a purchase that sales or use tax is due on certain purchases made from the seller and that the State of Arkansas requires the purchaser to file a sales or use tax return. (TAXDAY, 2017/02/09, S.3)

Governor Hutchinson stated the additional revenue will help lower the state’s income tax rate, making Arkansas more competitive with its surrounding states. The Governor’s statement is available at http://governor.arkansas.gov/press-releases/detail/gov-hutchinsons-statement-on-amazons-decision-to-collect-sales-tax-in-ar.

Statement on Amazon’s Decision to Collect Sales Tax in Arkansas Starting in March, Arkansas Governor Hutchinson, February 10, 2017

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