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First, a sales tax is not a tax on the business selling the items; it is a tax on the people BUYING the items.

So a national sales tax collection law would not be allowing a state to tax a business in another state, it would be requiring a business selling things to people in a state to collect that state’s sales tax.

Because the feds have done nothing, the courts have ruled that a state can only ask a company to collect taxes from sales in the state if the company has some business “nexus” within the state. That term is not precisely defined, but it covers an online sales outlet that also has stores, and in some cases includes franchises, and independently owned-and-operated businesses that license the name of the company.

Amazon has gone so far as to make sure that it’s shipping warehouses are actually separate business entities, so that they don’t have to collect sales taxes in states where they ship their products. Some states have threatened to challenge that “separation” as not being sufficient, but Amazon threatens to remove their warehouses if they do.

The affiliates program is another way states have looked to go after Amazon, and so far Amazon has threatened to pull affiliates.

BTW, if the congress wanted, they could pass a law that allowed states to collect duties on sales of goods to another state, not that I think they should.

Here is my two assertions about this discussion. First, a lot of people violate their state’s tax laws; if the states had a foolproof way of finding and punishing those people, most people would follow the use tax laws of their state, just as they follow the income tax laws (since the state gets pretty good records of income).

Second: If the states COULD crack down on tax cheats, such that everybody felt compelled to follow the law and do use tax filings, then people would overwhelmingly WANT Amazon to be forced to collect the sales taxes, because they would hate having to keep track themselves and file the paperwork and pay the bills themselves (Virginia is pretty easy, once you keep the records, you just file one more form on your state income tax).

The only reason Amazon gets away with these threats is that a LOT of people have no idea they are supposed to pay sales tax, and think that this is a NEW TAX being pushed on them, rather than the state making things EASIER for them to obey the law.

An analogy. Suppose there were no speed limit signs, and instead everybody had to remember the law as written about the speed on various roads. Suppose further that the state cracked down on all speeders, and was giving out tons of tickets to people who couldn’t remember whether a divided highway was 55 or 50, or what it drops to if there is an undivided section.

DOn’t you think that people would SCREAM for the state to install speed limit signs, in order to help them obey the law?

That’s what this is — helping us obey the law. It will cost Amazon almost nothing, because they already have the software in place. It only hurts people who are currently NOT paying their taxes as they are supposed to.

BTW, there are other ways states have been trying to approach this, and Amazon fights those as well. One attempt was to get Amazon to simply provide a record of all purchase shipped to a state. This would be trivial for Amazon to do, and wouldn’t require them to send any money, or calculate anything, or collect anything. But Amazon still fights this — because it would make it hard for their customers to cheat on their taxes, which is part of Amazon’s selling points, that you can buy from them, and cheat on your taxes and therefore save money.

Soon, I think the states are going to go after credit card records instead. I would oppose these measures, but understand why — it’s because we can’t do a reasonable thing and impose a national sales tax collection scheme.

I think I’ll stop pushing this soapbox now. I know few people will agree with me, and I’m repeating myself.

Thank you all for a wonderful debate.