Some experts believe that the growth in e-commerce will cause states and local governments to lose tax revenue, unless Internet transactions are subject to sales tax. What is one argument that supports this view, and one that opposes it?

What will be an ideal response?

This issue has sparked strong differences of opinion among national and state leaders, consumer advocacy groups, and trade associations whose members offer online sales and services. Those who believe that Internet transactions should not be taxed often point to other sales channels, such as mail order firms that conduct no physical operations within a state or locality, and therefore do not collect sales tax. Should the Internet be treated differently? Opponents of a tax-free Internet often cite the impact on local and state government, and suggest that all channels should operate on a level playing field. You might ask your students to research and debate this issue. Also, you might follow this topic as news occurs during the course.