by Frank Shafroth

About the author: Frank Shafroth is director of state-federal relations for the National Governors Association, a lobbying organization that represents the nation’s state governors.

Currently, Internet-based merchants are not required to collect sales and use taxes, which places them at a significant advantage over traditional retailers. This inequity could have a profound negative impact on not only retailers but local communities because it risks states’ ability to collect the revenue needed for education, police, and other essential services, and could lead to increases in state property or income taxes.

Nearly 40 percent of all state revenues come from the sales tax; it is the single most critical source of funding for public education in the United States. But, unless Congress moves to restore a level playing field, current...