State treasurers will be asked to subject almost all imported parcels to goods and services tax under a dramatic proposal that would cut the GST-free threshold from $1000 to just $20.

NSW Premier Mike Baird has already signalled his support for a lower limit. Victoria's Treasurer, Tim Pallas, is open to the idea.

The change is being pushed by federal Assistant Treasurer Josh Frydenberg​, who wants to level the playing field between digital and physical sales after this year's budget extended GST to all digitally delivered music, movies and software regardless of the price.

Without further change, electronically imported goods will be more heavily taxed than physically imported goods when the new rule comes into effect in July 2017.