The U.S. Senate has passed a bill that would subject online sales to state sales taxes. The issue pits brick-and-mortar retailers, including some of the nation's biggest chain stores, against online retailers such as eBay and Amazon. Those online retailers do not have to collect sales taxes, except in states where they have offices or distribution centers. This creates a small pricing advantage for them.
Ugly as it sounds, the brick-and-mortar stores are correct, of course. Taxation should be equitable. It is not fair to force some retailers to pay while others don't. Revenue collected from sales taxes helps fund some government services, such as roads and bridges, that help those online retailers when they are delivering goods their customers order.
Yes, it is true that sales tax revenue also is used for a broad range of government services, many of which may be beyond its proper functions. But that is a political debate that should be settled on its merits. We cannot agree that the Internet should be a tax-avoidance tool for some but not others. If sales taxes are egregious, then no one should pay, and alternative ways should be found to fund, say, roads and bridges.
While the Senate has passed the bill, there is some doubt whether the House will. Many conservative members there see applying sales taxes to Internet purchases as a tax hike. This seems to be an ongoing trap for conservatives. Tax equity and tax reform cannot be forever dismissed because taxes will rise for some. The principle should be fairness. Then move forward and make the case to reduce the overall burden of government and, with it, taxes.