The economic arguments against taxing electronic commerce are strong. First, such taxation is inefficient. Imposing multiple, overlapping or discriminatory access or sales taxes on the Internet or electronic commerce in general would be extremely difficult and inefficient in practice. Having 30,000 or even just 50 tax jurisdictions and policies would create a confusing and counter-productive domestic tax regime. Imposing such a tax regime on the Internet or electronic commerce would also have an extremely deleterious effect on the Internet sector just as it is beginning to grow and expand. Industry output and entrepreneurship would likely be greatly curtailed as a result.
