> Amazon hasn't argued against 'Use Taxes', so it's not like they're making a principled stand that states have no legal right to this 8-10% of the purchase value. Amazon just doesn't want to collect it, which essentially helps their customers evade a legal (but usually-ignored) Use Tax.

I don't believe that is quite correct. I recall Amazon stating that they are fine with the idea of collecting use taxes for states their customers are in, IF IT CAN BE DONE REASONABLY.

Here's the problem--it is almost impossible to figure out reasonably what the right tax amount is. Let me illustrate for one state. My employer is in Washington, so we have to collect tax for sales to Washington residents. A given customer is subject to the state wide sales tax, their county's sales tax, their city sales tax, and possibly taxes from other districts.

In total, there are nearly 3 million tax "locations" in Washington. There is a table available from the state that gives the total tax rate for each of these locations.

The "location" boundaries do not necessarily align with zip code boundaries, so the only completely accurate way to determine the tax rate on a customer is to get their street address and look it up in another table the state provides, which lists every valid address in the state and its tax rate. Looking up addresses is very hard, because people often give addresses in some form that doesn't match the official form of their address. You need to deal with things like people who live on "Martin Luther King" street saying they live on "MLK" street, or just "King" street (and of course there are "King" streets that are not "Martin Luther King" street...).

So we cheat, and go by zip codes. If we have the zip+4, we take the highest rate of any location that overlaps that zip+4. If we only have the 5 digit zip, we take the highest rate of any location that overlaps that. This likely means that for many customers we are charging them more tax than we actually have to. We could try to be more sophisticated, and perhaps figure a weighted average based on population information or something like that--that would be fairer to the customers on average, but would probably not convince the state auditors that we collected enough tax, and that results in having to pay up what the state calculates and they always seem to err on the side of more tax.

Now multiply this by 50 if you have to collect for every state. You'll have auditors from 50 states demanding you justify the amount you are turning in. You greatly increase the chances that some customer who happens to know the tax rate for his exact location will get pissed that you charged him too much and will make trouble.

You'll have 50 different databases you'll have to download at least quarterly, and some more often whenever the legislature fiddles with taxes. They'll probably be in almost as many different formats.

It would simply be a nightmare. A big company like Amazon could probably handle it, but it would be annoying for them. For smaller companies, like ours, where there is one person dealing with sales taxes, it would be a nightmare. So I'm very very very glad Amazon is fighting this.

This HAS to be handled on a national level, with either one rate per state to collected by out of state internet sellers, or one rate per 5 digit zip code, and the rate data needs to be available from a single source, and if a state or locality changes a rate other than once a quarter, the requirement to collect the new rate should not go into effect until the quarter boundary.