Not to be outdone, Congress appointed a commission earlier this month to study the issue. Of course, not all Internet purchases are tax-free, only those made across state lines. In other words, electronic commerce is treated exactly the same as mail-order business. And for mail-order, the Supreme Court says that states have no authority to tax outside their borders without the express permission of Congress. Most states ask consumers to pay a ''use tax'' in lieu of sales tax on all purchases.
Few consumers volunteer.
At first glance, the pro-tax case sounds reasonable. In theory, they shouldn't be. But in the real world, there are several reasons why letting states tax e-commerce from out of state is bad policy. First, there is no immediate danger of large revenue losses for traditional retailers or state tax authorities. Local stores cater to a customer's desire for a hands-on experience, offer immediate gratification and don't charge for shipping.