All I hear is no one wants to pay but everyone wants services. On purely local level want good roads, police, firemen, courts, well maintained boulevards, good schools and teachers, snow removal etc etc but no one wants to pay. Government needs to do its share and I’ve spent some time harassing a local council to lower city taxes but lets face it, right now they are all incapable of making ends meet.

While you can purchase something online and not pay local sales tax, you end up paying shipping, which does stimulate the economy and more directly than a sales tax would (ask UPS and FedEx employees).

The government and legislators are just too far behind the new realities introduced by the internet to understand this perhaps, but in essence the geographical abstractions introduced by going online cannot be accounted for by traditional legislation.

Consider this_ if you want to apply sales tax to interstate trade and do it in as similar a way to traditional retailing as possible, then the obvious answer is to apply the state sales taxes of the state in which the goods are sold (this is what would happen if you bought locally or crossed a state line to purchase something). IE you pay the sales tax of the state in which the retailer is doing business. this is typically how legislators approach new legislation_ try to equate it to something familiar.

Sounds simple until you realize that sales taxes vary quiet a bit from state to state (EG Oregon has none). So the obvious next move for e-tailers would be to relocate to a state with no local sales tax. There go your online sales tax revenues. Just as Delaware is a great state in which to incorporate, the states with no sales taxes will become the preferred locations for e-tailers.

Now imagine the outcry from the states in which companies such as Amazon are currently located when these firms start relocating their operations and workforces to other states without sales tax. Geez, how “unfair” is that?

Now consider that most e-tailers do not carry much inventory but are actually just virtual storefronts for someone who does actually stock and ship product. So a consumer in Delaware purchases an item from an e-tailer located in California and the order causes the product to be drop-shipped from a warehouse in Montana. Which sales tax gets charged? Who is responsible for collecting it?

It’s just not as easy as it sounds and regardless of what gets done, someone will be miffed.

BTW, those employees of UPS and FedEx are roughly distributed according to the demands of online shoppers. They will then pay income taxes in the states in which they are employed (assuming that their states have income taxes) and THAT is how the online commerce feeds back into the economy and the tax base. Note that this way the dollars passed though the economy twice before being sucked up as taxes and the income is roughly distributed to the states where the buying and selling is happening in the form of more jobs and salaries.

A bill expected to be introduced in the U.S. Congress as early as Monday..

Congress is not in session today.