A bill meant to close a retail tax loophole failed to pass the senate on March 8 but Senator John McComish says it’s not dead yet.
“There’s an old saying in the legislature that nothing is really dead until we adjourn for good,” McComish said. “There’s a possibility that there will be an amendment added to a bill that is in the house now that would do some of the same things that this bill did. That’s a possibility. I don’t know if that’ll happen or not.”
The bill, Senate Bill 1338, would require online retailers, like Amazon, that have a presence in Arizona to collect Arizona sales tax. Currently Amazon does not collect Arizona sales tax because the company does not have a retail location in Arizona. Creators of the bill say a distribution center should count and online retailers like Amazon should collect taxes like other Arizona businesses.
During a vote on March 8 the bill failed to pass with a vote of 20 to 8 but it was brought up again for reconsideration on March 13. Again the bill failed though this time with a vote of 16 to 14. The bill will now be considered as an amendment to another bill either during committee or on the floor.
During the reading of bills on March 8 Senator Jerry Lewis explained why he decided to vote against 1338.
“This is a tough bill for all of us,” Lewis said. “It’s been one of the most heralded bills since we began this session. It pits one company against many other worthy retail organizations. It is for that reason that I vote against it.”
Lewis said he did not feel this bill would level the playing field, as it was meant to, but that a similar bill working its way through Congress would do the job better. He also said he didn’t support a bill that changed the rules on a company after they had built four distribution centers in Arizona.
“For me they came here under the current law and the 1992 Supreme Court decision that basically stated as long as you did not have a retail outlet within that state you had no nexus, therefore you fit within the definition of the Arizona revised statutes,” Lewis said. “For us now to change the rule makes it a little difficult for me to go back to people who are wanting to locate their businesses here and say ‘Please come to Arizona where we may change the rules on you at a later date.’ I think changing in the middle of a stream is not good policy and I would like to encourage more businesses to come to this great state and plant their roots and be able to know we’re not going to change the rules on them.”
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