These facts are of fundamental importance, since a substantial fraction of the sales tax base of most states consists of sales to business. It is important to tax electronic commerce like other commerce. Most obviously, a significant and rapidly growing amount of revenue is at stake. Both horizontal and vertical equity are also implicated-the latter because the affluent are much more likely than the poor to be engaged in electronic commerce, and thus to benefit from any failure to tax electronic commerce. Perhaps more important, economic neutrality and fairness for local vendors requires equal taxation of electronic commerce.
Research shows that sales over the Internet are quite responsive to failure to collect use tax.
Exempting electronic commerce would be distortionary and grossly unfair to competitors on Main Street.