[ars]

It's time for the Congress to get involved here.

Pass a law that each state can specify a single tax rate for any shipments into that state. Then all retailers everywhere would have to collect that tax and pass it on to the state.

If the state wants to distribute the money locally let them handle it themself - the retailer sends a summary with the city names, and total amount, and the state can figure out how to distribute it.

I'm a fan of taxing via sales tax instead of income tax.

[true_religion]

> Pass a law that each state can specify a single tax rate for any shipments into that state. Then all retailers everywhere would have to collect that tax and pass it on to the state.

At that point states would be able to set higher rates for shipping than for in-state sales tax. That would create a protectionist economy for their in-state businesses which is precisely what the founders feared would occur if you allowed states to control inter-state commerce.

States have a bias to their own businesses because their business owners/employees are also voters.

[billpg]

I imagine the federal sales tax would be set to the same level as the state sales tax. States couldn't change one without changing the other.

(I've not really thought this through. The above is just a random thought. Be nice.)

[yummyfajitas]

Then states will likely raise the in-state and out of state tax to high levels, and provide rebates/subsidies to in-state businesses only.

Best not to go down that road.