I had to write the software that integrated our system to a web based streamlined sales tax software provider. This “service” costs our company A LOT of money per year to “subscribe” to the service. This is the hidden cost of taxation that takes $$$ straight off the bottom line.
We send this service our invoice information including the address of the customer and what they bought and the service returns the amount of tax for each line item and the type of tax (use vs. sales). The service then keeps track of which states & municipalities we owe tax dollars to and how much. They also keep track of the tax rates nationwide.
Here’s the BIG problem. Small business. I heard a lady on a radio program that has a small business making hand-made jewelry and shipping in-state and out of state. She said it is absolutely crippling her to keep track of her where her sales are going, the tax rate for that destination, and reporting it accurately to the state. She cannot afford to pay a “service” to do what our company pays to have done. She probably will end up either folding or going underground and waiting for some compliance officer to throw her in jail. What a liberal paradise.....
IF the woman just operates in one state, she has no obligation to collect sales tax for any other state, and no other state has the legal ability to go after her for the sales taxes.
So if she is spending money doing so, she probably had bad business advice from someone who operated physically in more than one state.
Of course, if she travels to other states to do trade shows, that would obligate her to collect sales tax for those states — but that is her choice to do business directly in those states, it has nothing to do with her selling things on the internet.