How Did a Story on an Online Sales Tax Bill Get Lead NY Times Slot? By Splitting the GOP

Monday's lead New York Times story was an unusual choice for the top slot: online sales taxes. But the headline provided a clue why the Times would want it prominently displayed: "Push To Require Online Sales Tax Divides the G.O.P. -- Antitax Groups Falter." The text box to Jonathan Weisman's story gave another hint: "Antitax groups seem to be losing their longtime influence."

While there's a debate to be had here on fairness and federalism, Weisman was most interested in fostering a split in the Republican Party. (Nice to see the Times being supportive of business all of a sudden, though.)

Legislation that would force Internet retailers to collect sales taxes from their customers has put antitax and small-government activists like Grover Norquist’s Americans for Tax Reform and the Heritage Foundation in an unusual position: they’re losing.

For years, conservative Republican lawmakers have been influenced heavily by the antitax activists in Washington, who have dictated outcomes and become the arbiters of what is and is not a tax increase. But on the question of Internet taxation, their voices have begun to be drowned out by the pleas of struggling retailers back home who complain that their online competitors enjoy an unfair price advantage.

Representative Scott Rigell, Republican of Virginia, calls them “the hardworking men and women who have mortgaged their homes to buy or to rent a little brick-and-mortar shop.”

And each time Mr. Norquist and others in the antitax lobby take a loss, they start to seem more vulnerable, Republican lawmakers acknowledge, with ramifications for the continuing fights on the deficit and the shape of the tax code.


The Marketplace Fairness Act would allow state governments to force Internet retailers to collect sales taxes from their customers and remit the proceeds to state and local governments, just as brick-and-mortar retailers have done for decades. The states would be required to provide free software that would be embedded in retail Web sites to do the calculations.

Weisman found a lot of sympathetic Republican sources.

For Representative Austin Scott, an ardent conservative Republican from Georgia, it’s Ken’s Trading Company, where the profit margin on a Leupold rifle scope is lower than the sales tax too many Georgians are avoiding by shopping for the same scope on their computers.

“We respect their opinion. I’m glad they’re there as conservatives,” Mr. Scott said of the antitax groups. “But the fact of matter is, in the end we have a job to do.”

Business Day reporter David Streitfeld assumed an internet sales tax was proper policy and complained only that it had arrived too late in Saturday's "Internet Sales Tax Coming Too Late for Some Stores." He didn't skimp on the melodrama.

As it builds new warehouses and extends its already considerable reach, Amazon is relying less on price than speedy delivery, free shipping and a selection that encompasses just about everything. Small retailers say Amazon was always a significant opponent, and is now a fearsome one.