E-commerce sites are soaring. But what about the sales tax?

Online retailers generated $44 billion in the last three months of last year, according to the Commerce Department, up from $38 billion a year earlier. Wouldn't it be nice if all those transactions were taxed? Dream on -- states can't force retailers without a physical presence in a state to charge sales taxes. And as we all know, many of them don't. Too bad, because we're talking about some serious money. California lost around $1.4 billion in uncollected e-commerce sales last year. From Real Time Economics:

When MIT economists Glenn Ellison and Sara Fisher Ellison looked at online sales of computer memory modules, for example, they found that sales were substantially higher to high sales tax states than to low sales tax states -- "clear evidence that tax savings are an important motivation for online shopping," they wrote. That means that, to some extent, the sales that offline retailers are losing to online retailers is due to sales-tax differences. And if some of those Main Street stores don't survive as a result, state and local governments lose even more tax revenue.