In 1995, Amazon founder and CEO Jeff Bezos started his Internet retail company in the state of Washington instead of a more populous state, like New York or California, in part because operating in a small state limited the company’s sales and use tax liability.1 Companies are only required to collect and remit taxes for sales from customers who live in a state where that company has a physical presence, so a company that operates in California but sells nationwide would incur tax collection liability on approximately 12% of its potential sales.2 Bezos even looked into the possibility of setting up the company on an American Indian reservation near San Francisco to avoid tax liability for every state, but “the government thought of that first.”3 Eighteen years later, Amazon, along with a coalition that includes groups representing state and local governments and large brick-and-mortar retailers, is pushing for legislation to allow states to require that all Internet sellers charge sales and use taxes to customers and remit taxes owed to the respective states.4 The company’s tax liability has been growing as it has built distribution centers in more and more states to permit same-day delivery, allowing those states to require Amazon to collect and remit sales and use taxes on purchases within their borders.5 Amazon apparently wants to neutralize the advantage enjoyed by competitors whose presence in fewer states enables them to avoid charging sales and use taxes.6 Sales taxes are typically imposed on sales of tangible personal property, and consumers are responsible for paying the tax, while retailers are responsible for collecting the tax and remitting it to the state.7 Sales taxes apply to purchases made within a state and do not reach goods purchased from another state.8 Use taxes, a counterpart to sales taxes, are imposed on goods purchased out-of-state and apply to the use or storage of the good within the state.9 Use taxes were created to prevent encouraging residents from buying goods remotely in order to avoid paying sales taxes.10 Internet retailers like Amazon and other remote sellers, while subject to sales tax collection responsibilities for in-state transactions, are not required to collect and remit use taxes on purchases by out-of-state customers under current law.11 Instead, the individual who purchases from an out-of-state retailer has a responsibility to assess her use tax liability and remit the taxes owed to the state.12 A company selling its products out of state can be required to collect use taxes only in jurisdictions where it has a “substantial nexus” to the state.13 States have typically relied on physical presence in asserting nexus, although some states have claimed authority to impose use tax collection on vendors based on other factors, such as whether company representatives in the state solicit business.14 That is why large Internet retailers like Amazon only collect sales and use taxes for purchases from a handful of states, whereas companies like Walmart, with stores throughout the country, are required to collect and remit sales and use taxes wherever they are owed. By purchasing a product online from Amazon instead of Walmart, the consumer typically avoids having to pay a use tax on that good.15 In the rare case where the consumer voluntarily pays use tax to his home state, he gets at least a deferral advantage because use taxes are typically not owed until state income taxes are due.16 Because Internet retailers are already responsible for collecting sales taxes from purchasers who live in a state where they have a physical presence, this Comment focuses on use tax collection liability.17 This Comment argues that current law is flawed because it favors online and remote sales over intrastate transactions by exempting the former from use tax collection liability. To address this unfairness, this Comment argues that Congress should pass legislation that would allow states to require Internet retailers and other remote sellers to collect and remit use taxes for out-of-state purchases. More precisely, the U.S. House of Representatives should approve a bill similar to what the Senate passed on May 6, 2013.18 This legislation would result in a tax system that is fairer, more efficient, and more easily administrable than the current system. Part II describes how the inability to impose use tax collection liability on online retailers is depriving states of revenue and outlines how states and members of Congress have reacted to this problem. Part III discusses the constitutional hurdles that have prevented states from being able to tax remote sales. Part IV describes legislation advanced during the 113th and 112th Congresses (the current and 2011–2012 sessions, respectively) to remedy constraints on the ability of states to collect use tax revenue under current law. Part V analyzes these legislative proposals as compared to current law. Part V.A argues that the current legal framework is a poor fit for the current economic reality and rise in e-commerce. Part V.B argues that legislation pending in Congress would result in greater equity among businesses, consumers, and states. Part V.C argues that the legislation would boost efficiency since tax considerations would no longer distort consumer behavior, as well as result in a more administrable system because companies selling products online are in the best position to collect use taxes. Finally, Part V.D argues that a small seller exemption, if needed at all, should exempt only the smallest businesses given simplification measures required under the proposals and the availability of software to calculate use taxes in different jurisdictions.