States' voice in the nation's capital.

• Position: NCSL IN D.C.

NCSL works to enhance the role of states and state legislatures in the federal system. We guard against unfunded federal mandates. We fight to protect state authority from unwarranted federal preemption. And we urge Congress to follow the example of state legislators in reaching across the aisle to address many of the important issues that have stalled with congressional inaction.

Internet Sales Tax Fairness: Is this the year?

If given the opportunity, the U.S. Supreme Court would likely reverse Quill v. North Dakota, its 1992 ruling that a state cannot require businesses not physically present in that state to collect and remit applicable sales taxes, even though they are due. In fact, in a 2015 concurring opinion, Justice Anthony Kennedy wrote that, due to the advances in technology as well as the tremendous growth in ecommerce, the decision is now antiquated. "The legal system should find an appropriate case for this Court to reexamine Quill." he wrote. Kennedy may soon have that opportunity. Laws in Alabama and South Dakota may ultimately make their way to the Supreme Court.

Members of Congress are acutely aware that they are running out of time to address the problem legislatively. Internet tax bills are expected to be introduced in both chambers in the coming weeks, but with Congress focused on other priorities, such as health care reform and rewriting the federal tax code, their future is cloudy.

With the hope of a congressional solution dimming, nearly 20 states in 2016, and about half the states thus far in 2017, have considered solutions through legislation or by administrative rule. Generally, states have considered three different approaches.

1. Pass a law that ignores Quill's physical presence standard and requires large out-of-state businesses to collect and remit applicable taxes. Alabama and South Dakota have taken this approach.

2. Require, by administrative rule, that the big marketplaces, such as Amazon and eBay, collect and remit taxes for all of their sales to state residents. This approach has captured a large portion of uncollected sales tax revenue in several states.

3. Require out-of-state businesses to either collect and remit taxes or report to the state department of revenue the amount of taxable sales made in the state each year. This approach-used in Colorado-was challenged, but the Supreme Court decided not to hear the case.

It's still unclear how this issue will be resolved, but it is becoming clearer that it...