The United States of America was founded under the complexities and enforcement of taxes. Unquestionably, the issue focused on jurisdiction and, fundamentally, taxation without representation. Over two centuries later and at the dawn of a new millennium, that former union of states has been transformed into an unparalleled nation, phenomenally redefined in every facet by the advent of computing and networking technologies. As a result, a “new world” has been discovered characterized by a borderless and timeless virtual dimension that challenges the very application and future of conventional tax policy. Specifically, this thesis analyzes the states’ sales and use taxation of the trillion dollar emerging digital economy by examining governing sales and use tax legislation and landmark tax cases. The future, in a sense, is the fusion of the past and innovative visions of the present. Accordingly, this study utilizes an analytical approach by returning to the era of this nation’s birth to unite Adam Smith’s maxims of tax policy with the fundamental tax perspective in the twenty-first century. Guided by these principles, the current difficulties and complexities presented by the convergence of state sales and use tax and electronic commerce are objectively examined. This thesis concludes by presenting model tax considerations and proposals for the development of an effective taxation of electronic commerce to provide a harmonious gateway between an old nation and a new, connected, digital world.