The real problem here is that the sales tax is a regressive tax that is resented by one and all, yet it is the funding source for all kinds of worthy and neccessary civic endeavors.

I have owned my bookstore business for many years, and I can tell you that the sales tax disadvantage is real, and the effort to avoid collecting it has been a cornerstone of the growth of Amazon and other internet retailers. One bookstore chain in particular spent millions of dollars making the case that their internet business was completely separate and unrelated to their storefront business (even though they bore the same name, that customers can return books to their stores that they bought online, that there were kiosks in the stores where people could shop online on their internet site, etc etc) –all to avoid having to collect sales taxes. Clearly it was a huge loophole that they feared would seriously hurt their business if it closed. They quietly changed this policy partially in hopes of avoiding the huge penalties that would be levied on any of us who failed to collect sales tax when we were legally obligated to do so.

Small and large Main Street business are already being put out of business by the internet retailers, and it isn’t because of paperwork.

It’s been in place two or three years now (I think) and the editorials get a kick every year commenting (tongue-in-cheek) on how few people in our state shop online!

Laura K. — I’m glad to hear it is doable though I’m sure you are right that it won’t happen unless such laws affect more people. And probably by the time such a program is developed, some small busineses will have gone under.

My state has a basic state tax and then also additional taxes in different areas. The state tax is 5% but counties can add on for levies, etc. Sales tax in the county I live in is 6.5% and about 30 miles north it’s 6% About 80 miles west it is 5% Also there is no sales tax on groceries or take out food. Next state over reduced sales tax on groceries, no break on prepared food in restaurants but reduced tax in stores. 3rd state (it’s a tristate area) no sales tax on groceries, prepared food is taxed at state tax level. (Amazon sells food items I don’t know if any would fall under prepared but it could complicate things.)

Edited to add most states have the tax where consumers pay in state taxes on any item not taxed at the time of purchase that is to be used in state. It’s called a use tax.

This distinction is important, because a small-business independent book store, e.g., that trades across the country is not likely to construct an entire affiliate program and thus will NOT be affected by this suit. Having run a small-business independent book store years ago :) , that was my interpretation of the suit.

Good Grief! I would hate that. Taxes are hard enough without adding that component. I thought the laws some of the places I lived were convoluted, but that’s…Byzantine! I’d never be able to keep track…

Actually, my shopping cart system (ZenCart, which is Open Source) does this for me in a limited way. When I set it up, I had to enter the various states in which I hold sales licenses and what taxes I would be collecting. It adds all those for me, and when I have to file my sales tax collected (which, in the states I collect for is annual because I don’t make enough in any individual state to have to submit more than once a year!) I export my “orders” to a database and sort them by state. It’s clunky, but manageable. I think your idea is eminently “doable” and not a pipe dream at all, but it won’t happen until more people are affected by laws like this. When/if that happens, I suspect someone will make a mint coming up with a system that streamlines everything out of your order system and plugging that info into printable forms for various state’s sales tax. I file most of my sales tax forms online (except for MA, which I still have to file in paper form), so I don’t think it’s a stretch to believe someone could create software that would collect the needed forms and collate them to fill them out from your order system.

Like Jana, I have to break down my sales into taxable sales and non-taxable ones. I also have to keep track of the wholesale buyers’ identification numbers in case I get audited. Now, that’s a system I’d like to see streamlined!

Does the fact that Amazon is now a manufacturer/supplier of retail products (i.e., Booksurge) and not just a reseller shift the advantage from Amazon’s argument to New York’s?

The programmers would have to read up on the tax codes of different jurisidctions and keep updating the program when rules changed, but the business owners would not have to. It could be a sort of advanced Turbo Tax for internet businesses. When I do my taxes with Turbo Tax, I don’t need to know the rules because the program calculates my taxes for me.

The communications with the government could also be printed out or e-filed by the program, as TurboTax does it.

Now, the programmers would probably have to have some full time accountants on staff, but the program could work for many businesses so it would not be a full time job for anyone but the software designers.

Does this sound possible or is it a pipe dream?