MasterSlaveLA
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Some info on the matter via the net...
quote:
Amazon to cut ties with Calif. retailers over sales tax
Amazon told its affiliates in California that it will terminate its contracts after Governor Jerry Brown signed a law requiring online retailers to collect state sales tax.
A 1992 Supreme Court case found that states can only tax companies with a physical presence in a given state.
In this case, lawmakers argued that the online retailers such as Amazon and Overstock.com should collect state taxes because they are associated with referring companies based in California who are targeting California consumers.
The law is similar to legislation passed in Illinois, Rhode Island, North Carolina and Connecticut, each prompting similar action from Amazon.
Source: http://www.washingtonpost.com/blogs/faster-forward/post/amazon-to-cut-ties-with-calif-retailers-over-sales-tax/2011/06/30/AGKRmUsH_blog.html
quote:
Must ecommerce businesses collect and remit sales and use taxes?
A state tax regulator or other taxing authority may require a business located outside the area to collect sales taxes from its customers and remit them to the taxing authority if the seller has a sufficient “nexus” with the taxing region. Where the seller lacks a sufficient nexus, the buyer could be required to levy a use tax on himself and pay the tax to the government entity. As most buyers are unaware of their use tax obligations, compliance with use tax laws under these circumstances is rare. Where a seller only has electronic contact with a taxing state based on a Web site that is accessible there, the taxing state’s ability to require the ecommerce site to collect sales taxes is limited.
US authorities seeking to tax ecommerce transactions must meet the same requirements under the Constitution that they must meet when taxing any other type of commerce: they may impose taxes on sales within their regions (sales taxes) or they may levy taxes on the use of property located there (use taxes) only if such taxes comply with the Due Process and Commerce clauses of the United States Constitution. Due process analysis depends upon the extent to which the remote seller takes action directed at the residents of the taxing state, in addition to establishing a Web site. Under the US Constitution’s Commerce Clause, the state may impose the tax if the “tax [1] is applied to an activity with a substantial nexus with the taxing State, [2] is fairly apportioned, [3] does not discriminate against interstate commerce, and [4] is fairly related to the services provided by the State.” Forty-five states impose sales and use tax on commercial transactions. Delaware, Montana, New Hampshire, Oregon, and Alaska do not.
While there has been no definitive ruling as to what level of presence or activity constitutes “substantial nexus” for taxing purposes in connection with electronic commerce, in its April, 2000 Report to Congress, the Advisory Commission on Electronic Commerce acknowledged that the substantial nexus requirement of the due process clause prevents states from imposing use tax collection and remittance duties on remote e-commerce retailers. And the Supreme Court has held that “substantial nexus” in the context of sales and use taxes requires that a seller have a physical presence in the taxing jurisdiction before a state may impose a duty to collect taxes. Thus, a retailer whose only contacts with the taxing state are by mail or common carrier—i.e., advertisements, flyers, and catalogues sent through the mail or by common carrier—lacks “substantial nexus” and cannot be required to collect taxes for that state.
But if an online seller maintains some physical presence in or physical contact with the state, it may be required to collect and forward sales tax.
Source: http://www.safeselling.org/taxes.shtml
quote:
Sales Tax
A state or local-level tax on the retail sale of specified property or services. It is a percentage of the cost of such. Generally, the purchaser pays the tax but the seller collects it as an agent for the government. Various taxing jurisdictions allow exemptions for purchases of specified items, including certain foods, services, and manufacturing equipment. If the purchaser and seller are in different states, a use tax usually applies.
The vast majority of states impose sales taxes on their residents. The only exceptions are Alaska, Delaware, Montana, New Hampshire, and Oregon. Some states rely more heavily on sales taxes for a significant portion of revenue. Tennessee, for instance, does not impose an Income Tax, so it relies heavily on sales taxes. The combined state and local sales taxes average about 9.25 percent per sale. The state of Michigan imposes a six percent sales tax, which accounts for about 28 percent of the state's total revenue. In 2002, the state collected $6.5 billion in sales taxes.
States have faced a long struggle to collect sales and taxes from retailers that are based outside the state and have no contacts with the state seeking to collect taxes. This is particularly true of companies that sell goods through mail orders or on the Internet. Even if an out-of-state retailer is not required to pay sales taxes within a state, the purchaser is nevertheless required to pay the sales tax on goods and services purchased through the Internet or by mail order. However, states rarely collect these taxes from the purchasers. According to a study by researchers at the University of Tennessee, states and cities in the United States lost an estimated $13.3 billion in uncollected sales taxes in 2001.
The U.S. Supreme Court has addressed the issue of states requiring out-of-state retailers to pay sales taxes on several occasions. In Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 97 S. Ct. 1076, 51 L. Ed. 2d 326 (1977), the Court required a showing of a "substantial nexus" between a taxing state and the company providing goods and services before the taxing state can require the company to pay taxes. Without this substantial nexus, a state that taxes an outof-state retailer has violated the Commerce Clause of the U.S. Constitution.
Subsequently, the Court applied this test to a case involving a state's attempt to tax a mail order company. Quill Corp. v. North Dakota, 504 U.S. 298, 112 S. Ct. 1904, 119 L. Ed. 2d 91 (1992). In Quill Corp., the state of North Dakota sought a Declaratory Judgment that Quill Corporation, which had is main offices in Illinois, California, and Georgia, was required to pay taxes on sales with North Dakota customers. Quill had no outlets or any sales representatives in North Dakota, though it received $1 million of its annual $200 million in sales nationally from the state. The Court held that North Dakota could not tax Quill because Quill did not have a substantial nexus with the state.
In order to address the problems associated with the collection of sales taxes on the Internet, the National Governors Association drafted the Streamlined Sales and Use Tax Agreement, whereby states would agree to modify their sales and use tax laws to a more uniform structure. Thirty-one state representatives signed the agreement, though individual state legislatures would have to modify their tax statutes to conform. The agreement is designed to remove complications among the sales and use tax laws in the different states and to eliminate the potential for double taxation. Several commentators, however, have noted that such an arrangement could violate the Commerce Clause based on the decisions in Quill Corp., Brady, and similar cases.
Source: http://legal-dictionary.thefreedictionary.com/Sales+Tax
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RE: Amazon Wants California Voters to Decide Sales Tax ... - 
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