Why this Matters to Retail:
The government gives online-only retailers an unfair advantage over their Main Street competitors by allowing them to avoid collecting the sales tax owed on purchases. This loophole creates a perceived price advantage ranging from 6 percent to 10 percent, distorting the market and threatening jobs on Main Street.
In 1992, well before the e-commerce boom, a United States Supreme Court decision prohibited states from requiring out-of-state sellers to collect and remit sales tax like their in-state competitors. However, the Court invited Congress to provide states the authority to compel collection.
In the decision, the Court wrote,
“the underlying issue [of whether remote sellers should be required to collect sales taxes] is not only one that Congress may be better qualified to resolve, but also one that Congress has the ultimate power to resolve.”