The bill sounds like a reasonable idea.

I can see taxing purchases according to the sales tax rates of the buyer's state. There might even be a business niche among payment processors, providing geo-location (or customer-provided) tax lookups integrated into a shopping cart service. Paypal and Amazon probably already have preliminary designs sketched out.

Taxing access, however seems like it would take the growth of the Internet in the wrong direction. The bill would prevent this, if enacted.

Dare I say it? Good one, Washington!

My understanding of politics is that bills like these tend to have expiration dates so politicians are on a perpetual cycle of gathering funding/PR for the same issues repeatedly. So while the end result may be good, the reason it's even under discussion is a bit sad.

> I can see taxing purchases according to the sales tax rates of the buyer's state.

i would prefer to see tax rate set at the "seller" country, not the buyer's. I hate regional pricing. Setting tax rate for the "seller" instead would mean that countries (or states?) have to compete on taxes, which will force gov't to better utilize resources instead of adding taxes for inefficiencies.

If we tax by the seller's location then the sellers will move, at least on paper, to those states whose laws are most convenient. Much like various island nations today list fortune 500 companies in their chambers of commerce. Also, Delaware.

By using the buyer's location to determine taxes, states will still be competing tax-wise; it would be healthy competition, as opposed to a competition where the winning move is one to the Bahamas.

I fear it would end up like the mess we have here in Washington state if they did something like that. We have to collect and report sales tax based on the Zip Code, and the records are updated quarterly. Their data set is something like 140,000 rows per quarter since it's fairly randomly distributed across the Zip+4 range.

If that logic held, then the buyer would move to the state with the lowest taxes in order to pay less on everything they buy. This is not reality.

People factor this in all the time. It's reality when considering a new job or retirement. You often see articles on the tax implications of living somewhere and it's factored in to many of the "most livable city" lists.

And even though it's usually illegal not to report it on a tax return, people cross state lines a lot for purchases (cigarettes, alcohol, electronics). Portland for instance has no sales tax while its very close neighbor Washington has no income tax.

This could all play out with Internet taxes too.

Moving is generally much easier for sellers, who are more likely to be large corporations, than for buyers, who are more likely to be individuals.