[tsycho]

Well, to be fair to the physical retailers, all online retailers should pay sales tax since you are giving them a 10% pricing advantage otherwise.

Amazon (and others) are exploiting a tax loophole, and the state governments are trying to stop that. They should, however, make such rules for all retailers, and not target Amazon specifically (I am not sure if they are doing so, but the parent comment makes it seem like that).

[CWuestefeld]

You're making a big assumption, that it's Amazon that's exploiting a loophole, rather than the the State being exploitative. You're assuming that the State has some inherent right to grab whatever money it can get its hands on. Can you explain why a retailer that's not in the state ought to be on the hook for these taxes?

In other words, rather than simply assuming that states have essentially unlimited authority to tax (subject to their courts and legislatures), is there a point where the authority to tax ends? At one extreme, I would submit that they can't tax me, sitting here in NJ. (However, I once had the State of Connecticut contact me, forcing me to prove to them that I didn't need to pay them income tax, so it appears to me that States do believe that their power is unlimited). On the other hand, few would argue that, say, a local shop ought to be exempt. Where do we draw the line?

[sharth]

Technically, it's the customer who is cheating the state. If I was to buy a product on amazon and not pay sales tax on it, I am supposed to pay a use tax on it at the end of the year.

[isleyaardvark]

How so? If I go to New Jersey/France/Mars and buy a candy bar, my home state has no business adding a sales tax. If I write a letter ordering a candy bar delivered from New Jersey/France/Mars, they have no business adding a sales tax. So why tax an order made online from out-of-state? The state is overreaching it's bounds, and that's why Amazon's letter says it is unconstitutional.