The recent appeals court ruling on the Borders case in California is the most current example of the expansion of efforts to tax e-commerce transactions, E-Commerce Times writes. Having complained for years that they have been denied valuable tax dollars from internet-generated sales, the majority of U.S. states - so far, 43 of them - are moving to tax online shopping, arguing that they lose as much as $16 billion annually in tax revenue. Those states have joined a coalition called the Streamlined Sales Tax Project (SSTP), which wants to collect sales tax on all internet purchases and is working to clarify tax codes to do so.

The SSTP program would enable states to collect sales tax from out-of-state merchants who have no stores, warehouses or other physical facilities in the state where the sale occurs. SSTP proponents say the new software to be used as part of the program would make tax collection almost automatic, and the systems could be in place as early as this October.

The online sales tax program is still voluntary, and most merchants do not collect taxes on online purchases, though some, like Eddie Bauer and Wal-Mart, do. An online seller usually has to collect sales tax only if it has a physical presence in the purchaser's state. Some retailers avoid charging tax by establishing legal subsidiaries to handle internet business; however, this has upset bricks-and-mortar retailers because their customers must still pay tax.