Originally Posted by TBell
The last I checked, the federal government does not collect a sales tax. Amazon has to collect a state sales tax for places it has a physical residence. For everybody else, it is their responsibility to pay the sales tax.
Technically, states can only collect SALES tax on sales made inside their jurisdiction IF the seller and buyer are located in the same state at the time of the transaction (taking delivery) AND the state can prove the seller has nexus (i.e. an office or representative physically located in the state).
Obviously, these laws were written back when that's how pretty much ALL transactions took place (the buyer and seller being in the same physical location); mail-order put a damper on this, and online sales, well...
Obviously, the simplest solution is to view ANY delivery vehicle (even common carrier) as the seller's representative, thus establishing nexus and obligating sales tax. What remains to be seen is if the states actually have that legal right. This would also impact ALL companies that ship products across state borders, not just online companies. And these companies would now have the burden of reporting to potentially 49 other states, collecting money, etc.
In the mean time, states already have USE tax (which is what you're referring to by saying it's the buyer's responsibility; it's known by other terms too) which they enforce mainly during audits and mostly to businesses. But it costs too much to collect (since they don't have corporations acting as their minions) and if they enforced it more, there would be public outrage.
The simplest solution is to require merchants to submit the equivalent of a 1099 to each purchaser and report it to the various states. Then people would have to report it on their state tax return. People wouldn't like this, though.