Abstract: Tax revenue losses to electronic commerce generally arise because electronic commerce enables a significant increase in remote sales, thereby causing a shift from collecting sales tax at the point of sale to collecting use tax in the state. Numerical studies show that the sales/use tax base is quickly eroding in the United States and countries in the world due to online, Internet electronic commerce purchases. Establishing an effective, accurate and efficient system for recovering sales and use tax by forming an electronic commerce Tax Recovery Center is designed. This Tax Recovery Center will be the hub of all electronic commerce information for all fifty states. Business transaction data on the Internet will be collected, secured and delivered to each state revenue agency in the format that each individual state requests. Geographic Information Systems (GIS) technology will be used to provide jurisdictions and municipalities' data to assist and enforce collection of use tax from instate purchasers.