(FORTUNE Small Business) – They're coming. It's no longer a question of if, but when and how. No, not the aliens, but Internet taxes, which have been alien to the Net thus far. Derek Bulkeley--who runs San Francisco online antiques dealer SeriousCollector.com--thinks Net sales taxes are inevitable and that a federally imposed flat tax is better than any state-based solution. "If Montana asks for a 5% tax, and South Carolina asks for 11% except on chickens, you're looking at a national nightmare," he says. Utah Governor Michael Leavitt, the leading pro-tax proponent on the 19-member Advisory Commission on Electronic Commerce (ACEC), would prefer to keep the state sales tax infrastructure in place but simplified, to avoid just this scenario.

The primary compromise plan on the table proposes extending the current moratorium on Internet taxes (slated to expire in October 2001) for a few more years, giving the states time to develop a consistent Internet sales tax in terms of both goods and fees.

Even after the acec makes its recommendation in April, don't expect any significant move from Congress before November, because there's no debate about the popularity of tax laws in an election year.

--Bronwyn Fryer