Today, you can purchase shoes from New York, beef from Texas, and surfboards from California all through the power of the World Wide Web. But local taxing jurisdictions are faced with the dilemma of how to deal with out-of-state sales and use taxes when it comes to purchasing goods over the Internet.

Presently, on many Internet commerce sites, when a consumer orders a product it is often shipped from a location outside of Washington state and the consumer is usually not charged sales tax. To avoid the complexity of the bookkeeping involved with keeping tabs on tax collection from sales, companies often don’t charge sales tax – instead they leave the consumers responsible for paying the tax themselves – something consumers rarely do (most do not even know of the requirement). This results in millions of lost potential tax revenues to the state and local governments. It also results in a competitive disadvantage to local retailers because many consumers opt to purchase goods tax-free over the Internet.