YES, we are supposed to pay sales tax on our purchases online.  YES, there are local retailers that feel they are operating under unfair conditions, with customers "shopping them" and buying online without the sales tax added.

But the last part is not as much an issue as one might think.  When shipping costs can add 5-10% easily anyhow, the difference in cost is simply that of the ability to compete (or desire) in the free marketplace.  The ability of online retailers to ship from more local warehouses does present a competitive advantage, but the ability to show and demonstrate is a far better sales tool than price advantage alone.  The balance for fairness is already there.

Yes, there is a built in fairness mechanism already, yet the state does not collect in all cases, and that is what is being chased.

OK.  If the states trying to collect these taxes feel they must enact some type of mechanism, there is a constitutional means that would be easier for the retailers who engage in online sales. But it would involve all states at once, and probably a new federal government entity.

Yeah, not my favorite route either.  And there should be a great deal of study into the possible side effects before implementing.

We (businesses) all pay fed taxes quarterly anyhow.  We have certain reporting requirements that require us to send forms on a regular basis to our masters in Washington. Here is how it could be done:  (And yes, we should not be sure it can be held off permanently)

1. We track sales numbers collect sales tax, and take a small cut for processing when shipping or drop shipping.  Drop shippers STILL remain anonymous since they handle no financial transactions with end user.  Money collected for online sales 3-4% sales tax goes into into fed clearing house with monthly or quarterly taxes and report to fed.
   
2. State treasuries get a printout for taxes paid on products delivered into their states.
   
3. Treasurers CLAIM the monies minus a minor processing fee to cover cost of clearing house operation.

That might be a worthwhile end.

No, I'm not the guy who likes to agree with any more misery spreading through regulation or more taxes.  I am against increases of taxes, adding of taxes, or making it harder for business to operate.  But if we are going to get it anyhow, it should be used to replace those systems which are far worse anyhow.

For now however, the main street fairness efforts should be abandoned unless the states are willing to see their smaller business entities once again burdened to the point of extinction.  Thinking twice would be good before we put before the people this new method of financial extraction.