Remote Vendors and American Sales and Use Taxation: The Balance between Fixing the Problem and Fixing the Tax

1273 National Tax Journal Vol. LIII, No. 4, Part 3 Abstract The remote vendor problem challenges the sales tax as a revenue producer; even more critical, though, is damage to economic balance, efficiency, and fairness. Congressional relief from the physical presence rule—rendered obsolete by uncertainty about what presence means and by “click and brick” affiliates—requires no undue burden for multi–state enterprises. State adoptions of a burden–reducing common tax structure would be virtually impossible because states have substantially different shares of their tax systems at stake in the sales tax and because they start from unique sales tax structures designed for their own economies and politics. Congress could handle the problem by requiring registration for large remote vendors, but only for states affording vendor–friendly compliance (no local use taxes and reasonable collection compensation).