How damaging a tax would be ecommerce depends on how elastic the demand is. A sufficiently small tax would still gain revenues for the government (a la the Laffer curve). An alternative "solution" to the tax dodging issue is to institute a national sales tax or VAT. While that would encourage consumers to purchase from foreign nations, typically shipping internationally is more expensive, both directly in $$$ and convenience. A uniform national tax would be much less expensive for the firms to implement than trying to deal with taxes from the various States and localities. Politically, it's probably not feasible, but it is a way to avoid the States playing "beggar thy neighbor" tax codes while enforcing a tax on consumption.
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How damaging a tax would be ecommerce depends on how elastic the demand is. A sufficiently small tax would still gain revenues for the government (a la the Laffer curve). An alternative "solution" to the tax dodging issue is to institute a national sales tax or VAT. While that would encourage consumers to purchase from foreign nations, typically shipping internationally is more expensive, both directly in $$$ and convenience. A uniform national tax would be much less expensive for the firms to implement than trying to deal with taxes from the various States and localities. Politically, it's probably not feasible, but it is a way to avoid the States playing "beggar thy neighbor" tax codes while enforcing a tax on consumption.