Why does Arkansas prefer an origin-based sales tax system over a destination-based one?

Arkansas prefers an origin-based sales tax system over a destination-based one primarily for administrative simplicity and alignment with local revenue allocation. Origin-based taxation allows businesses to collect sales tax based on the seller’s location, reducing the complexity of managing multiple tax rates for sales across different jurisdictions. This system streamlines compliance for businesses operating within a single location, as they only need to apply one set of tax rates.

Additionally, origin-based taxation ensures that tax revenue benefits the locality where the business is located, supporting local infrastructure and services in the seller’s area. This approach can foster economic growth in specific regions by providing targeted funding. Furthermore, origin-based systems are generally easier to administer and enforce, reducing administrative burdens on both businesses and tax authorities.

Overall, Arkansas’s preference for origin-based sales tax supports efficient tax collection, simplifies compliance, and ensures local communities receive revenue directly tied to the seller’s location.