Sales transacted on the Internet would be treated the same as catalog or phone sales: Unless a seller has a physical presence in the state of the buyer, no sales tax can be collected.

FORBES: Fact And Comment

The same year, Italian authorities told the European Union that criminals involved in prostitution rings, arms sales and drug trafficking were turning to Skype and similar Internet phone services to evade police.

WSJ: Mideast Uses Western Tools to Battle the Skype Rebellion

In the long run, sales of digital-music tracks purchased over the internet and revenues from mobile-phone ringtunes, may bring growth back to the industry.

ECONOMIST: Buying music can be highly profitable