Republicans' resolve to oppose higher taxes is well established, but a growing number of conservatives are recognizing that a national online sales tax is more about leveling the playing field for brick-and-mortar retailers.
South Dakota Gov. Dennis Daugaard is one of the Republicans seeing the light. "It's a matter of equity and fairness," he said.
The Senate, after a years-long debate, is poised to pass a bipartisan national online sales tax bill with as many as 25 GOP senators on board. They understand that the legislation will simply enforce a tax that's already on the books but seldom paid.
The House should follow suit and end local brick-and-mortar businesses' crippling 5 percent to 10 percent price disadvantage compared with Internet retailers.
California passed an online sales tax measure in 2011 that didn't go into effect until last year. Fears that it would harm business have not been realized. In fact, there was a 28 percent jump in online sales on Cyber Monday, after Thanksgiving, the biggest Internet retail business day of the year.
Only nine states -- Arizona, California, Kansas, Kentucky, New York, North Dakota, Pennsylvania, Texas and Washington -- collect online sales taxes. Few consumers in the remaining states realize they are legally obligated to calculate the tax on their online purchases and send it to the tax collector. State and local governments find these policies virtually impossible to enforce, and it's a borderline miracle when buyers take the time and effort to mail a check.
The federal bill is expected to raise as much as $11 billion in uncollected tax revenue that is desperately needed by states, counties and cities to provide essential services, such as keeping more teachers and police officers on the job.
Mom-and-pop online operations wouldn't be affected. The Senate legislation exempts businesses with less than $1 million a year in sales.
Internet giant Amazon supports the legislation -- knowing it isn't likely to hurt sales and preferring a simpler, nationwide policy -- although closer to home, eBay remains opposed.
Two decades ago it made sense to exempt online retailers from collecting sales tax on purchases. Congress wanted to spur the growth of a new form of business, and the challenge for retailers of figuring out what sales tax to charge customers from more than 7,000 jurisdictions was daunting.
Simple computer programs have eased that burden, and the online retail business is now a $230 billion industry. It no longer needs a built-in price advantage over local retailers, who are frequently fully engaged in their communities and support local charities and service organizations in meaningful ways. Nor should brick-and-mortar retailers suffer the pain of watching customers come to their showrooms, decide on a purchase and then go home and buy online.
Main Street and Internet shops should play by the same tax rules. Congress should force online retailers to calculate the required sales tax on consumer purchases and send the revenues to cash-starved states.