Tax Break Nears End For Online Shoppers

Republican governors, eager for new revenue to ease budget strains, are dropping their longtime opposition to imposing sales taxes on online purchases, a significant political shift that could soon bring an end to tax-free sales on the Internet.

Conservative governors, joining their Democratic counterparts, have been making deals with online retail giant Amazon to collect state sales taxes. The movement picked up an important ally when Gov. Chris Christie (R-NJ) -- widely mentioned as a potential vice-presidential candidate -- recently reached an agreement under which Amazon would collect sales taxes on his state's online purchases in exchange for locating distribution facilities there. The move toward taxing online sales has broad implications. Online shopping will become more expensive for consumers. Brick-and-mortar retailers won't have the price disadvantage they now have compared with online sellers. Strapped states suddenly could be flush with $23 billion in new annual revenue, according to the National Conference of State Legislatures.