The following editorial appeared in Monday's Washington Post:
An increasing number of states have passed laws that require customers to pay sales tax on Internet purchases.
Although a 1992 Supreme Court ruling - Quill v. North Dakota - holds that companies without a "substantial nexus" (read: physical presence) in a given state don't have to pay taxes on purchases made there, that changes when corporations such as Amazon name local affiliates or set up physical distribution centers. Virginia voted this year to close the so-called "Amazon loophole," which allows the online retailer to avoid paying the same local sales taxes that brick-and-mortar establishments charge. California and Texas have taken steps to do the same.
The change is overdue. There's no reason to favor e-commerce at the expense of other business. To that end, a bipartisan bill under consideration in the Senate, the Marketplace Fairness Act, would grant states the authority to require "remote sellers" to collect sales tax in exactly the same way local businesses are made to do.
The legislation requires states that choose to adopt online sales taxes to either implement a common set of guidelines for streamlining and simplifying tax collection or, if not, meet five basic simplification mandates stipulated in the bill.
Whether these requirements are enough to streamline tax collection is not certain.
The Marketplace Fairness Act may be imperfect, but the price of maintaining the status quo is too high.
For the sake of state coffers and local businesses, Congress should approve it - and states should adopt it in due course.