Gov. Haley Barbour endorses online sales tax

Gov. Haley Barbour (R-Miss.) endorsed the Marketplace Fairness Act, which would allow states to tax online purchases, in a letter released on Wednesday. 

“I am writing to congratulate you on the introduction of the Marketplace Fairness Act and offer my support for its timely passage," Barbour wrote in a letter to Sens. Mike Enzi (R-Wyo.) and Lamar Alexander (R-Tenn.), two co-sponsors of the bill. Sen. Dick Durbin (D-Ill.) is also a leading supporter.

 The bill would close what its supporters characterize as a loophole that treats online retailers differently than brick-and-mortar stores. Under current law, people who buy goods online are supposed to declare those purchases on their tax forms, but few do. As a result, most people do not pay taxes on their online purchases.

“Fifteen years ago, when e-commerce was still a nascent industry, it made sense to exempt startups like Amazon.com from collecting and remitting sales taxes in states where they had no facilities," Barbour wrote. "But today, e-commerce has grown, and there is simply no longer a compelling reason for government to continue giving online retailers special treatment over small businesses." 

Barbour, who served as chairman of the Republican National Committee, said the federal government should not stop states from devising their tax laws.

“Failure to level the playing field threatens to, and in fact has, run many of them out of business, taking with them jobs and the sizable contribution they make to not just our community culture, but to the organizations who have long benefited from their charitable involvement,” he wrote.

The National Retail Federation, which represents traditional retailers, is lobbying hard for the bill. Amazon also backs the bill, arguing the country needs a single national framework for collecting online taxes.  

But many online companies, including eBay, are lobbying against the measure. They say it would stifle online commerce and eliminate jobs.

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