The way I understand it, only individuals would be taxed at the retail level and not businesses. Therefore, individuals desiring to avoid the tax will attempt to establish "businesses" to do so. Rules and regulations defining business activity will be needed and someone will need to "police" compliance with these rules.
Simple, huh? It creates a situation not much different than what we have now regarding chasing tax cheaters, or avoiders, dedending on which side of the fence you're on. No system is perfect and there will always be people out there trying to bend the rules to their favor. Since that's a given, someone has to police the actual activity and taxes reported.
The speed limit sign can say 55 but you still need a policeman with a radar gun to catch the speeders.
We have always had the cheaters.
The only things I buy new is food, medicine and stuff like soap and toilet paper. :)