With 2 day shipping through the prime service, they pretty much emulate a local retailer. The prices are awesome but I can see how their tax advantages give them an unfair advantage on local competition.
To me, the implicit 10% discount to customer seems like major incentive for Amazon to not to do this rather than the technical difficulty of the issue.
I understand a startup having difficulty spending resources doing this, but not many startups have affiliates, Also, we should be worried that Amazon will cause states to make laws which will ultimately harm startups.
Complexity is a flimsy excuse for a giant like Amazon.
The argument above about how it's impossible/expensive/complicated/etc. to collect sales tax seems exceedingly bogus to me especially given the nature of HN: Sounds like a business problem to be solved, not some byzantine task. Someone should go make an online sales-tax-computing web service and be done with it.
Oh wait, someone did: http://salestaxwebservice.com/, http://www.avalara.com/products/avatax/calc, et cetera.