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Comment by WettowelReactor | Hacker News Reader

Wait if I buy an item in state Y and pay their state tax am I supposed to go back and pay state X where i live another tax on the same item? If not just have Amazon collect consumer taxes based on the state they are incorporated in and pay those back to that state. Then states would compete on corporate tax rates to attract business for the infusion of cash and the tax collection mechanism for online retailers is dramatically simplified.

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In some cases, yes depending on the state. If you buy an item in state Y and pay y% sales tax on it, then when you return to state X, sometimes you are required to pay the difference x%-y% in tax.

I am not a tax expert, but here are some examples I know of: A buddy of mine recently purchased a car while living in Texas, then moved to California a few months later and was required to pay the difference in sales tax on it before registering it.

New Hampshire doesn't have sales tax. The state of Massachusetts assumes people who reside in border towns will be purchasing goods there and automatically bills a yearly flat rate.

Generally, use tax covers only items not taxed otherwise, so certainly no you do not owe X any sales tax if Y charged you. But this is a summary of a summary of a summary, for more details you can start at http://en.wikipedia.org/wiki/Use_tax and start following links from there, because details will certainly vary from jurisdiction to jurisdiction.

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