Sales tax rates vary by state/county/city/municipality. Calculating tax accurately for many addresses can be tricky. The largest retailers can afford to buy pricey software to calculate tax rates, smaller ones cannot. Dealing with hundreds of tax collection agencies is time consuming.
Congress should create an Internet sales tax, say 5%, to simplify this mess. Then retailers only need to collect this one tax rate for all Internet sales.
Two options:
1) A 5% Federal sales tax on Internet sales. Retailers collect tax and send to the Govt, which then splits and sends to each state quarterly.
2) Declare 5% sales tax rate on Internet sales (as they once mandated zero taxes on Internet sales), but do not collect the tax. Retailers collect the tax and send it directly to each state quarterly.