Mail-order companies have long feuded with states and localities over sales taxes. But the principle that the buyer should pay sales tax to the state in which he resides has been well established. Now, more consumers are using the Internet like a 1-800 number to order goods. Despite the scare tactics from the mayors and governors, it will actually be fairly easy to collect and remit sales taxes on such transactions. And that is as it should be.
Sales taxes help pay for the infrastructure that brings buyers, sellers, and the goods together.
Nor should local businesses be the only ones to collect taxes. Last July, the Clinton Treasury Dept. issued a report endorsing this notion, known as tax neutrality. That means that the Internet should not bear special taxes, but nor should escape taxes that would apply to a non-cyber transaction. But many states have rejected neutrality in favor of chasing big money. Williamson saw the danger in states shifting their rules to siphon off tax revenue and win commerce.