- Associated Press - Tuesday, March 11, 2014

PHOENIX (AP) - The Arizona House of Representatives has for the second time voted down a bill that would have reduced income taxes to offset new collections from online sales.

House Bill 2465, introduced by Republican Rep. J.D. Mesnard of Chandler, would require state tax authorities to determine how much in new sales taxes were collected in online sales in the first year and reduce the following year’s income tax rate by the same amount. Estimates of revenue from Internet sales tax vary from $100 million to more than $700 million in additional state and local sales tax dollars per year.

People who purchase items online now owe state sales taxes, but there’s no way for the state to enforce that requirement. Part of an overhaul of the state’s business sales tax collection system last year would allow Arizona to collect those taxes if the U.S. Congress passes the Marketplace Fairness Act. The proposal has passed the senate but awaits action in the U.S. House.

Mesnard said collecting taxes on internet sales is essentially a new tax because it has never been enforced. Democrats argue that doing those collections is just closing a loophole.

Mesnard said taxpayers already pay enough. He implored legislators who had voted against his bill to reconsider.

“I think most of our constituents will be outraged,” he said.

Rep. Ethan Orr, R-Tucson, said he wasn’t comfortable voting for a bill that would offset taxes that are not collected yet.

The House voted against the measure 30-28 on Tuesday.

Legislators also voted for the second time on a Republican bill that would allow Arizona cities and towns to enter restricted federal land without permission in emergencies.

This time around, members approved House Bill 2541 after voting it down last week. They passed the bill by Rep. Kelly Townsend, R-Mesa, with a 35-23 vote.

Townsend says she was inspired by the battle between the city of Tombstone and the federal government over access to repair its water supply system in the Coronado National Forest. She says local authorities should have the right to go in where needed without being granted approval first in cases of emergency.

The bill lost support last week because House attorneys said it was in conflict with federal law and likely unconstitutional.

Rep. Bob Robson, R-Chandler, voted against the bill last week but in favor of it this week. He said he changed his vote because Townsend assured him she would rework language in the bill to address concerns over constitutionality.


Associated Press reporter Bob Christie contributed to this report.

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