In summary, use tax collection nexus cannot be resolved except by Congress, and uniformity in income tax nexus or taxation of electronically delivered products is unlikely to be resolved by the states. Congress, under the Commerce Clause of the U.S. Constitution, has the right to regulate interstate commerce. The Supreme Court has specifically stated, and has further indicated by their actions, that Congress should do so. We have made suggestions which resolve administrative burdens for electronic commerce without preempting the state's abilities to impose taxes, but merely by regulating the methods which they use to collect them. We urge the Administration to take a more active role in state taxation affecting electronic commerce by supporting Congressional action not to preempt state taxes but to preempt unfair and unworkable tax collection practices.
Federal legislation is the only mechanism which can create uniformity amongst the states.
It is desperately needed if electronic commerce is to reach its full potential.