For more than 50 years, the Supreme Court has prevented states from requiring out-of-state sellers to collect sales tax unless the seller has a physical presence, such as a local store or warehouse, in the state in which the sale occurs. Although the out-of-state sellers’ customers are supposed to remit tax on such sales, very few of them do so. As online retail sales continue to grow, states’ annual revenue loss has been estimated to be as much as $33.9 billion in 2018.
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Matrix Global Advisors (MGA) is an economic policy consulting firm in Washington, DC, specializing in fiscal, health care, and tax policy matters. Drawing on years of policy experience, the MGA team writes white papers and expert reports, and offers strategic advice to our clients.