On the recordSeptember 25, 1998
I will briefly state why I think this is such an important piece of legislation. First is fundamental fairness. We have a situation now in which remote commerce--that is, commerce that is not conducted through the traditional retail sales outlet--is effectively exempted from State sales taxes. The same sweater that one would buy at the local department store, subject to local and State sales taxes, is exempt from those taxes, for practical purposes, if it is purchased by a remote sale, either the traditional postal sales or by the newer electronic commerce. The U.S. Supreme Court has ruled that that degree of unfairness as to taxability of the form of sales is a decision which has been made by the Congress. It is, as Harvey Cox once observed, not to decide is to decide. Our decision not to authorize the States to impose a tax on the seller using a remote sales method has resulted in the inability of the States to impose that tax. Therefore, as we are looking at the issue of Internet sales, those of us who are concerned about this unfairness in the marketplace where our local merchants are required to collect the sales tax and, therefore, are subject to the competitive disadvantage of their remote sales brethren who are not--that this commission should study that issue.
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