Alabama governor gets behind online sales-tax push

Bentley is the latest GOP governor to support the online sales tax, which supporters are trying to cast as a states'-rights issue.

The Alabama governor argued that states’ sales tax bases are being eroded as more and more consumers shop on the Internet, and that the current system gives online outfits an unfair advantage over brick-and-mortar shops.

“When local retailers lose business, jobs are threatened, communities that depend on the businesses suffer and our state’s economy pays the price,” the governor wrote to the eight Republicans and one Democrat who represent Alabama in Congress.

Roughly 10 Republican governors have announced their support for making it easier for states to collect sales taxes on Internet purchases, including Gov. Mitch Daniels (Ind.) and Gov. Paul LePage (Maine), a Tea Party favorite.

Haley Barbour, the former Mississippi governor, is lobbying in support of the online sales tax now that he’s back on K Street.  

Advocates for the congressional proposals, such as the Retail Industry Leaders Association, say the support of Bentley and the other governors is a sign that momentum is on their side.

“It’s an important step to have conservative Republican governors out in front on this issue,” Jason Brewer, a spokesman for RILA, told The Hill.

Under legislation in both the House and the Senate, states would be allowed to levy sales tax on Internet purchases made within their borders, even if the retailer is located in another state.

As it stands, under a 1992 Supreme Court decision, states can only collect sales tax from online purchases if the company has a physical presence there.

Backers of the congressional bills, including the National Retail Federation, say that consumers already owe taxes on Internet purchases, and that the bipartisan legislation in the House and Senate would allow the states to choose themselves how or whether to collect.

Still, the congressional proposals also have some powerful opponents, and even the most ardent supporters say it could be tough for the tax bills to be enacted in an election year.

Washington observers don’t expect there to be much substantive action on Capitol Hill before November’s election, and the lame-duck session after the campaign is expected to concentrate on issues like the expiring Bush tax rate and the automatic spending cuts scheduled to go into effect after the failure of last year’s supercommittee.

That could leave little time for lawmakers to consider the online sales tax bills, sponsored in the Senate by Mike Enzi (R-Wyo.), Lamar Alexander (R-Tenn.) and Dick Durbin (D-Ill.) and in the House by Reps. Steve Womack (R-Ark.) and Jackie Speier (D-Calif.)

“We’re confident that there’s a lot of momentum,” Brewer said. “But we’re certainly cognizant of the calendar.”

Conservative opponents of the measures, such as Sen. Jim DeMint (R-S.C.), also say states should occupy themselves with lowering taxes, not finding new ways to collect them.

The business community is somewhat divided on the bills, with Amazon in favor and eBay opposed.