After the Arizona Senate abruptly postponed a vote on S.B. 1338 (its affiliate nexus bill) on Wednesday, yesterday, the Senate—just as quickly as it cancelled the first vote—took up the affiliate bill, and in a vote of 20-8, resoundingly defeated the legislation. During the argument preceding the floor vote, several senators, including Sen. Jerry Lewis (R), argued against the law, citing to the “many high paying jobs” that have been created in the state by Internet retailers, including Amazon.com.
This is not the first time that Arizona has considered affiliate nexus legislation… and it likely won’t be the last. Last year, and directly related to the legislature’s consideration of affiliate nexus, the state passed a bill that now requires residents to report and pay use tax on purchases made from out-of-state Internet retailers on their 2011 state income tax returns.
Notably, there is a pending bill in the house that would eliminate this use tax reporting requirement. Last month, Rep. Debbie Lesko (R) introduced House Bill 2629, which would remove the newly-added Line 30 to the state’s personal income tax return form. Proponents of the measure argue that Line 30 has led to vast confusion among taxpayers and an undue burden on individuals to track their online purchases. The bill was unanimously passed by the House Ways and Means Committee and is presently before the House Rules Committee. A hearing was held on the bill in the Senate Finance Committee earlier this month.