Conclusion
Some state and local governments are abusing the tax powers they already have – Congress should take steps eliminate that abuse before even considering expanding states’ powers to tax, or impose tax collection obligations on, out-of-state sellers. If Congress ever grants state and local governments more taxing power over out-of-state sellers, they should also:
- clearly delineate what types of taxes can be imposed,
- clearly delineate under what circumstances they can be imposed,
- provide a significantly less difficult way for sellers to challenge discriminatory taxes, and
- impose penalties on governments that do impose discriminatory taxes.