States and localities can tax their residents pretty much however they please. The fight over the "Amazon tax" has always been about whether Amazon was required

States and localities can tax their residents pretty much however they please. The fight over the "Amazon tax" has always been about whether Amazon was required to collect the tax or whether people were supposed to mail a check to the state on their own. There has never been any serious doubt over whether states and cities can levy the tax in the first place, just over whether they can force out-of-state companies to collect it for them. The bill you're thinking of is probably the Marketplace Fairness Act, which was about letting states force retailers with sales over $1 million to do the work of actually collecting the tax.