Last year they closed a loophole for serious* ebay sellers by having paypal issue 1099-K's, large** internet retailers will now be paying state sales tax. I can see where implementing this will be costly to the retailers and their customers.

"WASHINGTON (AP) — The Senate sided with traditional retailers and financially strapped state and local governments Monday by passing a bill that would widely subject online shopping — for many a largely tax-free frontier — to state sales taxes."

Click here for the linky.

* Serious in that it's triggered by 200 transactions AND $20,000 in sales. That's a small business.

** over $1,000,000 in on-line sales