A sale is a sale, whether it happens online or in a store. But for too long government has given some online retailers an advantage over their Main Street peers by allowing them to avoid collecting the sales tax owed on purchases made online. This unfair loophole results in a perceived price advantage of between 6 percent and 10 percent. Since the Supreme Court’s 1992 ruling in Quill Corp. v. North Dakota, states have been precluded from requiring out-of-state sellers to collect sales taxes from state residents unless the remote seller has a physical presence within the state. Based on estimates by the University of Tennessee, states lost over $23 billion in sales tax revenue in 2012 due to this loophole.

The status quo harms Main Street retailers whose stores employ millions of Americans who contribute to the community, and amounts to an unfair subsidy of online-only sellers. The federal government needs to stop picking winners and losers and treat all businesses the same.

Legislation introduced in the Senate and House of Representatives received broad bipartisan support in the 112^th Congress. In addition, the states’ rights legislation was lauded by a bipartisan majority of the nation’s governors, including Governors Chris Christie (R-NJ), Bill Haslem (R-TN), Paul LePage (R-ME), Martin O’Malley (D-MD), Jerry Brown (D-CA) and Deval Patrick (D-MA).

Absent a comprehensive federal solution, states have moved to address the inequity to the best of their ability. Most recently, a spate of legislative and regulatory actions in state capitals across the country have focused on Amazon.com and their obligation to collect and remit state sales tax because of facilities they maintain in a number of states. While these efforts will result in a level playing field for Main Street retailers with Amazon in roughly 50 percent of the U.S consumer market, these reforms still fall short of a comprehensive solution needed by the federal government to resolve the issue for all retailers once and for all.