One group insists on protecting state laws against the destabilizing effects of the Internet.

Then there’s a group saying states should stand idly by as the Net routes around their laws.

Would it surprise you to learn these seemingly incompatible positions stem from the same group?

Only if you haven’t already guessed, I’m talking about Congress. When it comes to providing a guiding light on complex issues, this collection of 535 candles in the wind can’t match the glow of a lone bug zapper.

A couple months back, the House and Senate endorsed a bill that would help state prosecutors enforce local liquor restrictions against online retailers. In so doing, they seemed to be saying the Net wouldn’t be allowed to undermine the democratic authority of state and local laws.

But this perfectly reasonable philosophy apparently had all the staying power of Morton Downey Jr. Before the final version of that bill has even passed, Congress is preparing to abandon its common-sense approach in the coming debate over enforcing sales tax laws online.

Nobody likes sales tax, of course, but everyone has to pay it. Everyone, that is, except people who shop at out-of-state stores via catalogs, telephones or the Internet. Since state and local governments can’t force companies located elsewhere to collect tax on their behalf, they can only hope their citizens volunteer to pay so-called “use tax” on goods purchased out of state. As you might expect, this happens about as often as teen-agers tune their radios to NPR.

This means cities and states stand to lose lots of tax revenue as more people start shopping online. Local stores, meanwhile, will continue losing customers to the Web because they have to comply with sales tax laws their online competitors can evade.

Congress could resolve this unfair situation by forcing online retailers to collect sales tax. Instead, it passed a law last year that banned new Net-related taxes for three years and created a committee to study the issue.

The so-called Internet Tax Freedom Act was a surefire election-year winner, giving supporters a way to seem friendly to the Net and unfriendly to taxes. It also left the distasteful process of actually addressing the problem to the Advisory Commission on Electronic Commerce, a group of 19 political appointees chosen to weigh the needs of local governments against the interests of online retailers.

If online stores were forced to play along with existing laws, they’d have to collect taxes on behalf of more than 7,500 state and local governments a difficult task when you’re not always sure where your customers live.

Moreover, many taxing authorities have introduced complications that would be difficult to deal with on a national level, such as temporary tax holidays and differing definitions of taxable goods. Fruit juice products, for example, can be either taxable or tax-free depending on how much real juice they contain and the percentage varies from state to state.

As high-tech lobbyists have presented these complaints to the commission, tax collectors have responded by offering to make things easier. State and local officials have proposed adopting uniform descriptions of taxable goods and allowing online retailers to collect a single tax rate for each state.

But before the commission has even considered such compromises, Congressional leaders have jumped in to warn them against coming up with a reasonable way to collect sales tax from online shoppers.

“We are concerned about the fact that most of the news reports from the first commission meeting seemed to focus on how to tax the Internet rather than whether to tax the Internet,” read a Sept. 14 letter signed by House Majority Leader Dick Armey, R-Texas, and 34 colleagues.

“The commission should remember that only Congress can authorize one state to compel sellers in another state to collect Internet taxes,” the letter continued. “This idea is not a popular one in Congress or among the American people.”

So it seems Congress is set to reject whatever workable plan its own commission may produce. House Republicans in particular seem happy to ignore the needs of governments and small businesses back home in exchange for high-tech dollars and the knee-jerk popularity that comes from opposing “new” taxes.

But if online retailers shouldn’t pay local sales tax, why should they abide by arcane liquor laws that sometimes route all shipments through a single company? While sales tax revenues support education, health care and other worthy programs, the liquor laws protected by recent Congressional action primarily serve to pad the balance sheets of liquor wholesalers.

That bill is dubbed the “21st Amendment Enforcement Act” to highlight the notion that the Net shouldn’t be allowed to undermine the law (which, in this case, authorized state liquor restrictions). But now it seems Congress is content to pick and choose laws the Internet will render moot based entirely on which interested party like liquor wholesalers can back their arguments with the most dead presidents.

This may be business as usual in Congress, but it’s a raw deal for local governments and the people who depend on them. And for local retailers, who face unfair competition against tax-free online stores, it’s going to start looking a lot like no business at all.

Syndicated columnist Joe Salkowski can be reached via e-mail at [email protected], or write to him c/o Tribune Media Services. Inc., 435 N. Michigan Ave., Suite 1400, Chicago, Ill., 60611.