Who Will Remit Sales Taxes on Internet and Mail-Order Sales?
The vitality of the sales tax as a critical state and local government revenue source has been eroded in recent years by the rapid growth in mail-order and Internet sales. Sales taxes are due on mail-order and Internet purchases just as they are on purchases in stores.(1) But a large majority of the sales taxes due on mail-order and Internet purchases made by individual consumers and a significant share of the taxes due on purchases made by businesses are effectively uncollectible. States and localities are unable to collect these taxes because the Supreme Court has prohibited states from requiring mail-order and Internet merchants to charge the customer for the tax and remit it to the customer’s state unless the merchant has a physical presence or “nexus” within the state’s borders. This means that although an Internet merchant like Amazon.com presumably has customers in every or nearly every state, it can only be required to collect sales tax from customers in its home state of Washi