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CNBC reports that the National Conference of State Legislatures (NCSL) has released a report saying that US states “could eliminate 13 percent of their combined budget gaps if there was an online sales tax ... According to the NCSL, state governments that collect sales tax - totaling 46 states and the District of Columbia - will lose an estimated $8.6 billion in potential revenue this year, with the loss projected to rise to $23.26 billion in 2012.”

Opponents of an online sales say that its imposition would hurt a still young industry, while proponents say that the lack of such a tax puts brick-and-mortar retailers at a significant disadvantage.

Current laws say that states can only charge sales taxes for online purchases if the online retailer has a physical presence - like a warehouse - in the state.
KC's View:
I’ve always been against an online sales tax, in part because I hate the idea of doing anything to hurt a burgeoning industry...and, to be perfectly honest, in part because it will hurt me. (I know that makes me a terrible human being, opposing taxes on selfish grounds, but there it is.)

But now I am conflicted. I hate the idea of more taxes, and so reflexively oppose a new online sales tax. But the states are in trouble, and I’m not sure that it is fair to continue to let online retailers off the hook on this issue.

The real question, I suppose, is what services will have to be eliminated by states if new revenue is not found. My experience is that a lot of people simultaneously want lower taxes and no fewer services ... which is, to say the least, a conundrum.