Streamlined?

In the latest version of the same old story — this one or, to a lesser extent, this one — sales taxes are down all over, and I'll include Rogers. A small increase is a loss compared to the big jumps it was getting.

Can we finally call the streamlined sales tax a failed experiment? Sure, most of these cities that are facing wild inconsistencies in sales tax revenue could benefit from simply removing the tax cap for businesses. (You see, individuals must pay tax on our full purchase, no matter how high, but businesses can stop paying taxes once their purchase hits $2,500. It's five paragraphs into this story, proving it was no surprise.) But that does not explain Springdale. It's easy to laugh at the city that caused its own downfall by chasing Sam's Club out of town, but that doesn't explain the near constant drop in sales tax revenue.

Here's the real problem. In hopes of encouraging a national mandate for Internet sales tax, Arkansas joined a growing, but misguided, group of states who have instituted the streamlined sales tax. This contingent charges taxes based on where a sale ends, not where it begins. To make it simple, if someone in Little Rock buys a product from Springdale and has it shipped to Little Rock, the Little Rock taxes apply and Little Rock gets the money. The buyer is taxed based on where he or she is, not where the item begins.

That means anything shipped out of state is not taxed.

Imagine if this was reversed. A purchase that originates in Little Rock with a company in Springdale is hit with Springdale taxes and Springdale gets the money. Replace Little Rock with Dallas. And now with Ontario. And with London. At that point it doesn't matter where the buyer is, because the purchase takes place where the business is. (In the aftershocks of this realization, state legislators would barely notice that merchants would then only have to follow one tax rate instead of all of them.)

Businessmen and women around Arkansas will slowly realize this and begin a financial revolution within this state. Of course, this could all be ended simply by common sense action at the General Assembly ... or a miracle, whichever is more likely.