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While Iowa has already decided the revenue will go into the Iowa Values Fund, other states are holding off earmarking the money until they have a better idea how much can be collected, Hardt said.
The money is clearly needed to help states deal with budget deficits that are expected to total $69 billion this year. (This month, Iowa Gov. Tom Vilsack ordered across-the-board cuts of $83 million from the state's $4.5 billion budget.)
"There are no other funding mechanisms right now" for the Iowa Values Fund, House Speaker Christopher Rants, R-Sioux City, said last week. "We already have many issues to look at, including how do we keep our essential services intact."
The erosion of tax dollars makes it imperative that Iowa and other states keep pressure on congressional leaders to pass the federal legislation, he said.
"Let's give this some time to develop," said Rants. "I've got to believe it's going to happen. . . . If it doesn't, it's back to the drawing board."
Iowa merchants have their own reason for wanting sales taxes collected from online and catalog sales.
Des Moines tobacconist Bartlett said collecting the tax levels the playing field. Without it, remote sellers continue to have a built-in price advantage.
"It'd help my sales," Bartlett said.
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