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John and Mary Smith are in deep do-do!

Rick_R 14th Apr 2010

Maria Sanchez, Maria Gonzales, John Smith, Mary Smith, Juan Rodriguez ... you folks better WATCH OUT!

Without taxpayer ID numbers, how is the state ever going to know who is who?

The reason on-line retailers are not required to collect sales tax unless they have a physical presence in the state is a 1967 U.S. Supreme Court ruling that forcing out-of-state sellers to collect sales tax is an undue burden on interstate commerce because there are THOUSANDS of taxing jurisdictions (for sales tax: state, county, city) and it would be ridiculously complicated. (For instance, part of a ZIP code could lie within a city and part in an unincorporated area, and the city has a sales tax. Texas alone has 254 counties!)

Although people might say, "Amazon can handle it," what about "Mary's Confectionary" that fills about 2,000 orders per year to 1,500 different buyers in 40 states?

The same "undue burden" problem would apply to these reports -- and federal law trumps state law.