The Internet creates a significant method of purchasing that defies traditional means of determining tax collection. In order to accommodate this new mode of trade, we propose California take the lead in supporting a federally regulated tax policy allowing states to collect taxes on all goods, regardless of the method of transaction. The strategy behind this federal basis of regulation is to avoid the dilemma of double taxation that threatens when different states have not only different rates of taxation, but completely different policies in general. Our recommendation is to persuade Congress to allow each state to
tax its constituency on goods that are bought and sold on the Internet.