M+E Daily

Today is Cyber Monday, when Americans are projected to spend $1.5 billion shopping online. That comes on top of the $1 billion they spent online on Black Friday, the more traditional kickoff to the holiday season. But this could be the last season when all those online orders get processed without appending sales tax to the total.

The Alliance For Mainstream Fairness, a group made up primarily of brick-and-mortar retailers, is taking advantage of the hoopla over Cyber Monday — the name was coined in 2005 by Shop.com to try to boost online commerce — to press Congress to approve sales taxes for online purchases.

“This should be the last holiday shopping season that Main Street businesses have to compete on a playing field that is not level,” Alison Joseph, a spokesperson for the group said in a statement. “Cyber Monday is just another opportunity for out-of-state, online-only retailers to exploit a government-sanctioned loophole that puts local businesses at a significant disadvantage over brick-and-mortar retailers. It is time for Congress to pass e-fairness legislation and require all retailers, online and on Main Street, to play by the same set of rules.”

Under current law, online retailers that do business across state lines are generally not required to collect or remit local sales taxes at the time of purchase. Technically, consumers who live in states that impose sales taxes are supposed to report their own online purchases on their state tax returns and to pay any taxes dues. But compliance is extremely low.

The Marketplace Fairness Act, introduced in the Senate earlier this year, would empower states to collect online sales taxes from out-of-state e-merchants. The bill would exempt small businesses earning less than $500,000 per year. Although the taxes would affect all product categories, it could have a dramatic effect on the competitive landscape for bigger ticket items such as consumer electronics and computers, where the savings from the lack of sales tax online are most significant.

While the bill saw little action in the recently concluded session of Congress, it has bi-partisan backing — a rarity in Washington these days. With many states strapped for cash due to the recession, even some anti-tax Republicans view collecting more sales taxes as preferable to raising income taxes. The bill has also gained the support of some large e-commerce players, notably Amazon, who see a national framework for sales taxes as preferable to a state-by-state approach. It also has the support of the National Retail Federation, which represents many large brick-and-mortar chains.

Supporters are urging Congress to act on the bill during the current lame-duck session. While that seems unlikely, given lawmakers’ all-consuming focus on the so-called fiscal cliff, the momentum behind the bill is building and could bring action early in the next session.