States and localities were concerned that they would lose an unacceptable amount of sales tax revenue through this new form of shopping. The issue was settled by a 1992 U.S. Supreme Court decision that says a state cannot compel a remote seller to collect sales tax unless the seller has a nexus in that state. The ruling also expresses the notion that it would be too burdensome for a single state to impose its rules on other states or jurisdictions, he adds. In addition, of all shopping done by consumers, only about 1 percent of it takes place online. With the Internet, in terms of individual consumers, the fears are not justified yet.
People still like to go to the mall.
Internet sales won't continue to grow exponentially. It will grow, but it won't overtake traditional shopping. Currently, businesses must be registered with the states of companies from which they buy as consumers. Early on in ACEC discussions, participants agreed that sales tax systems are complicated across the board. At our first meeting, the dominant factor was fairness.