The battle over online purchasing and sales tax might be winding to a close as more Republican governors are dropping their opposition to a mandatory state tax on Internet sales. The turning point may have been in May, when New Jersey Gov. Chris Christie cut a deal with Amazon.com: Residents of New Jersey would pay a 7% sales tax on Amazon.com purchases, and the nation’s largest e-tailer would build two distribution centers in the state.
“Having one of the most recognized and widely popular Republican leaders take this position gives other politicians comfort that the online sales tax is fair and helps state budgets in crisis,” said Scott Mason, VP government affairs at Lowe’s, in a Wall Street Journal analysis of the issue. The North Carolina-based home improvement chain has a 5% to 10% price disadvantage compared with online retailers, and some customers are using Lowe’s stores as “Internet showrooms” -- places to look at a product before they buy it online, according to the article.
Robert Niblock, chairman, CEO and president of Lowe’s, sits on the board and serves as secretary of the Retail Industry Leaders Association (RILA), a vocal supporter of what it calls “equal treatment of the collection of sales taxes.”
Virginia, Texas, and Nevada, which all have Republican governors, have followed New Jersey’s examples and made similar agreements with Amazon, the newspaper reported.
Six states already collect sales tax from Amazon on purchases; another seven states have plans in place to do the same.
Meanwhile, a bipartisan bill that would give states authority to mandate online sales tax collection is making its way through Congress.