Based on my experience, Republican primary voters almost always want two things: government out of their lives and out of the free market. So it comes as no surprise that on the issue of collecting sales taxes from online retailers, these GOP primary voters, above all else, desire a level playing field void of government interference.
As the issue gains attention, folks from both sides — Main Street and the Internet — are weighing on whether online-only retailers should be held to the same sales tax laws as our nation’s local businesses.
Main Street supporters see it as a matter of fairness: All businesses, no matter where they are located, should be required to collect and remit a state’s sales tax. The playing field, as it currently stands, favors out-of-state, Internet retailers, which exploit a pre-Internet loophole allowing them to evade collecting state sales taxes — even though they sell the same products to the same people in the same communities.
While “e-fairness” legislation to level the playing field and restore fairness to the marketplace is supported by growing bipartisan numbers in Congress, some in Washington have suggested conservatives will view this fix as a new tax. But a survey of Republican primary voters I recently conducted on behalf of the Retail Industry Leaders Association tells a different story. Conservatives outside the Beltway view this issue as a simple measure of fairness — getting government out of the business of picking winners and losers and allowing all retailers to compete in a true free market.
E-fairness legislation — such as the Marketplace Fairness Act in the Senate or the Marketplace Equity Act in the House — would give states back the power to more effectively collect existing sales taxes. Historically speaking, Republican voters have consistently supported a simpler and fairer tax code with fewer loopholes and lower rates across the board. And our poll found staunch support for updating our nation’s sales tax laws so that all businesses are treated fairly.
In our survey of 600 likely Republican primary voters conducted for RILA, almost a third mistakenly believe online purchases include the state sales tax, while 20 percent do not know one way or the other. Clearly, there is confusion when it comes to sales tax for online purchases.
Republican primary voters reject the idea of government giving some businesses a leg up over others. Our poll revealed 57 percent of Republican primary voters agreed that people should “be required to pay the same sales tax for purchase made over the Internet that they would if they had bought the item in person at a local store.” They agree that fair is fair and a sale is a sale, so no matter where an item is purchased, all businesses should have to play by the same rules.
While some Beltway Republicans have been slow to endorse e-fairness legislation, GOP voters back home are following the lead of prominent Republican governors and former governors who have already stepped up to show their support for such legislation — Haley Barbour of Mississippi, Jeb Bush of Florida and Bob McDonnell of Virginia, to name a few.
It boils down to a matter of fairness. An overwhelming 65 percent of likely Republican primary voters think it is unfair “that stores with a local retailer have to collect sales taxes, but online stores do not.”
Across the country, GOP governors who support closing the Internet sales tax loophole have already committed to using the revenue that would be gained from this to help alleviate or cut taxes in other areas. It’s a win-win situation: Closing the loophole protects local businesses (and the jobs they provide) and relieves local taxpayers as states are given the tools to scale back income, business and property taxes.
The current system is problematic and needs to be fixed, and Republican officeholders would be wise to listen to their political base and follow the lead of the Republican legislators and governors who are already showing their support for a level playing field. Getting government out of the business of picking winners and losers by restoring a true free market gives every business a fair shot to innovate, compete and create jobs — and that is something Republican voters support.
Glen Bolger is a partner and co-founder of Public Opinion Strategies, a GOP political and public affairs survey research firm.