Why must there be a federal solution?

Answer:  Local brick-and-mortar stores operate at a competitive disadvantage with remote sellers who don’t collect or pay taxes.  Local stores find themselves serving as showrooms for Internet and catalog sellers.  Prospective customers check out the merchandise locally but buy the product online or through a catalog to avoid paying sales tax.  Local merchants are at a competitive price disadvantage simply because remote sellers do not collect sales tax.

The U.S. Supreme Court in 1992 said in Quill vs. North Dakota that Congress has the power under the Commerce Clause to create a level playing field for local merchants.

Fourteen hundred retailers collect sales tax in Streamlined states under a voluntary system.  Those 1,400 retailers have collected over $700 million in sales tax for Streamlined states, but that is a very small fraction of the amount of sales tax that remains uncollected.  Some studies estimate that states lose billions a year in uncollected sales tax and it could reach as much as $23 billion by 2012.  Only Congress has the authority to let states require collection of the billions of dollars in uncollected sales tax.  Now that these states have made tax collection simple and easy for retailers, Congress can adopt legislation that applies to the products and services sold by remote sellers.