WASHINGTON — Syracuse resident Seth Hiatt, who turned a $2 thrift-store purchase into a multimillion-dollar business, believes a looming sales-tax proposal in Congress could jeopardize his success.

Right now, customers outside of Utah buying CDs, DVDs or other items through Hiatt's eBay store or other Web sites do not pay sales taxes — one of the benefits of making purchases online. But a pending bill in the House and Senate would change this.

Hiatt, along with his wife and business partner, Paula, and other eBay "power sellers" came to Washington recently to urge lawmakers not to support pending bills that would add a sales tax to their customers' online orders. But some lawmakers and retailers are still pushing for the change.

Under current law, states can only require businesses to collect taxes if they have a physical presence in the state. So for Hiatt, someone in California or Maine buying a DVD through his eBay store or his Web site, www.shopsphiatt.com, does not have to pay sales tax, but someone buying the same DVD through www.bestbuy.com would have to pay tax if Best Buy had a store location in that state.

In 1992, a U.S. Supreme Court decision left it up to Congress to figure out who should collect sales taxes on products ordered through the mail or now through the Internet — and Congress is still deciding.

Under current law, taxpayers are supposed to pay a "use tax" and calculate what the sales tax would be on all the items they have purchased and had delivered from out-of- state-retailers. But Neal Osten, who handles the sales-tax issue for the National Conference of State Legislatures, said this is hard for people to understand, and hard for states to enforce.

"There is no easy and fair mechanism for a state to enforce a use tax," Osten said.

In some cases, the cost of enforcing it would outweigh the actual amount of money that the state would collect in taxes, he said. This leaves the 45 states and the District of Columbia that have sales taxes no way to collect their money on Internet sales if the seller is located in another state.

"This is not only fundamentally unfair to Main Street retailers, most of whom are small businesses, but it is costing states and localities billions of dollars in lost revenue," said Sen. Mike Enzi, R-Wyo.

"At a time when states are increasingly turning to the federal government for program funding, it is logical that Congress would instead authorize the states to collect their own revenue instead of raising the federal tax burden to then distribute money back to the states."