State and local governments are urging Congress to allow them to collect sales taxes from online retailers, saying this will close a tax gap costing states billions of dollars per year and level the playing field for brick-and-mortar retailers.

"There is no better time than now — when local governments and states are continuing to find ways to mitigate the difficulties brought on by the financial crisis of the country over the past few years — to grant authority for remote sales tax collection," four state and local groups said in a two-page letter to leaders of the Judiciary Committee, which held a hearing on this issue Wednesday.

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