In farewell speech, Haley Barbour pushes for online sales tax

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.

Legislation pending before Congress, the Marketplace Fairness Act, would empower states to force online retailers to collect sales taxes.

"Indeed, good public policy says it is past time that our brick-and-mortar merchants on Main Street and in our shopping centers get a level playing field with Amazon and the Internet — that they get fair treatment for paying our taxes," said Barbour, who served as chairman of the Republican National Committee during the 1990s.

The National Retail Federation, which represents traditional stores, is lobbying hard for the online tax. Amazon also backs the measure, arguing the country needs a single national framework for collecting Internet sales taxes.  

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

Barbour said according to some estimates, the bill would allow Mississippi to collect an additional $300 million.

"We could increase our spending on education or public safety or economic development or we could reduce the sales tax rate or the income tax rate. So this is not about spending," Barbour said. "This is about being allowed to collect the money that is already owed to us, and our authority to collect is being usurped by the federal government."

Barbour plans to rejoin lobbying firm BGR Group, which he co-founded, after he leaves office.