State and federal lawmakers are poised to solve a complex problem that has prevented states from collecting sales taxes owed on many purchases made via the Internet.

Two pieces of legislation — one pending in the statehouse and another in Congress — would establish a sales tax collection mechanism for states. They should be passed.

In Colorado, it would mean almost $74 million, money that could be used to pay for roads, schools, prisons and other basic services.

It's worth emphasizing that this is tax already owed, but overwhelmingly not paid because people either don't know they owe it or are not inclined to pay it voluntarily.

The routine function of tax collection has been disrupted by a rise in Internet-based sales and a U.S. Supreme Court decision that left states without means to collect taxes due.

It's also worth noting that if you go to a local store and make a purchase, you pay sales tax. But a sale conducted via the Internet routinely does not include sales tax in the total due.

That's because a 1992 Supreme Court decision said a business must have a physical presence in the state for that state to collect sales tax on purchases. However, the court also said this could be overcome by federal legislation. That was more than 20 years ago, long before buying goods online was routine.


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In the interim, as people have migrated to the Internet to buy goods, the stores with a local presence have found themselves at a competitive disadvantage.

The legislation pending in Congress would provide the authority states need to collect the tax. The bipartisan bill has been favorably received in the Senate, but faces a more uncertain fate in the House.

The measure in the Colorado legislature, House Bill 1295, is crafted to mesh with the federal act, and would create the structure necessary to enable the state Department of Revenue to collect sales tax and audit collection. If it passes, it would take effect only if the federal Marketplace Fairness Act also succeeds.

That's a good protection, given the uncertainty that any bill faces in Congress these days. Even though this measure has significant bipartisan support, and has been endorsed by President Obama, there's no telling how it will fare.

We hope good policy and shared purpose trump politics and both measures become law. It would provide much-needed revenue for vital government services, and bring equity to the retail landscape.