Next time you go shopping, look at the sales price of an item you want to buy. Compare that price with the somewhat higher price you actually end up paying. That difference is what we all know as a sales tax. Now, sign on to amazon.com (Amazon) and look up the exact same item. You will likely notice that the online price is lower than it would otherwise be in a brick-and-mortar store. You will also notice that unless you are in one of the nine states in which Amazon must charge a sales tax, the final sale price is the same as the ticket price.
Although seemingly unfair, this difference in price between the local brick-and-mortar store and the pure-play online retailer is consistent with the 1992 Supreme Court holding in Quill Corp. v. North Dakota. In Quill Corp., the Court held that a state has taxing authority over an out-of-state retailer only when that retailer has a “physical presence” within the taxing state. Despite the immense expansion of both the Internet and electronic commerce (e-commerce), the 1992 case continues to control today. Consequently, cash-strapped states have become more invested in seeking alternatives that would require out-of-state retailers to charge their in-state consumers a sales tax at the time of purchase. . .