Then there’s the energy/environmental policy angle: favoring digital rather than physical consumption, in theory, uses less energy and fewer resources consumed. I’m not sure that is entirely true now, but it should be as we get smarter about designing sustainable systems.

Beyond that, an argument could be made that the public interest (‘an informed electorate’) is served by making an exception of media (both digital and physical), just as periodicals are not generally subject to sales tax. What is so special about periodicals? Is the information we read in NYT (or see in Fox News) more relevant to the choices we make in life than values and ideas communicated via literature, music, visual arts? Doesn’t making an exception here help give more space and substance to the conversations we need to have with each other? Probably a little lofty to base tax policy on, though..

Then there’s selfish self interest, of course. I don’t want to pay more for my ebooks!

Oh, it won’t surprise me if California starts taxing e-books electronically. They may have to define things a bit differently, but I can see that happening…

That’s because Amazon has a fulfillment center in Kentucky, and so is treated as doing business there. That allows KY to compel that sales tax collection under the current system.

Oh, and the other factor is that Kentucky is taxing e-books delivered electronically…not all states do that (California, where I live, doesn’t), basically on the idea that it is a contract rather than a commodity, I believe.

Just to clarify, none of it affects our digital goods delivered electronically in California (at this point). I know that’s true for e-books…but if you bought your e-books on a CD or DVD, it would be subject to sales/use tax in California.

I think, at best, there would be government-provided software that would handle those 8,000 jurisdictions for you. I don’t think that would be complicated, and states would likely support the development in exchange for collecting all that sales tax.

Another possibility is to simplify it, but as you say, that requires all those cities and such to revise their taxes, and that’s a heterogeneous nightmare.

Edited to add: the bicycle store’s out of state sales might also be under a threshold.

Amazon is for it, because they want to do same day shipping and this would grease the wheels for that. I think this is the end game they have been preparing for. This is not really going to level the playing field for bricks-and-mortar, it is the beginning of a new death struggle. Who really wants to spend an hour getting in and out of Walmart, Costco, etc. when you can have the same thing delivered to your door FOR FREE the same day with one click? Time is a very constrained resource for most people today, and I don’t see that trend easing up. I would not be surprised to someday see, in the not distant future, Amazon warehouses opening where big box retailers and shopping malls now hold sway. With a fleet of Amazon robots spreading out from there and delivering the goods 24/7 (once driverless vehicles make their appearance). Of course Walmart will set up its own same day delivery, eventually. But I think oxygen will be sparse for lesser retailers.

Of course none of this affects sales of digital goods, at least in CA.

What Amazon has supported is the idea of simplifying the number of separate sales taxes to be handled, ideally down to one per state. Anything along those lines would help small on-line vendors. But so far it seems no taxing body is yet willing to give up their very own special local sales tax rate that applies to just their town or county, even if the alternative is to receive no sale tax at all for on-line sales.

If forcing all on-line vendors to collect and remit all existing sales taxes to all taxing bodies separately is the end of the matter, expect Amazon to survive just fine, but also expect a lot of small on-line firms to go out of business.

Burdensome regulations, in the end, favor large companies over small ones.