I read the book "The Everything Store". There are large chunk of chapter devoted to how Bezos fought against paying tax. Originally, the argument was that onlin

I read the book "The Everything Store". There are large chunk of chapter devoted to how Bezos fought against paying tax. Originally, the argument was that online retailers don't use facilities provided by states so they are not obliged to pay any taxes to states. If I remember correctly, this follows almost directly from constitution. But then states like New York found a loophole which basically says if you have any affiliates in the state then you are physically in that state and so you are obliged to pay taxes. This thing is very messy because some regions not only have state tax but even district and city taxes. So calculating them is very complex task. When I thought about the whole situation, it became apparent constitution has a bug here. The sales tax is not supposed to be levied because the state is providing some service to the business. It is levied because that's how states want to distribute the burden of taxes on two components: What you earn and what you spend. This way you can target most of the money flow that happens in the state even for edge cases where a person don't have regular income but spends a lot out of his or her inheritance. So summary here is that online retailers got lucky from this bug in constitution. It was extremely unfair to brick-and-mortar guys who not only have to spend lot of capital but also pay full taxes losing their competitive edge even faster. Note: Above are just observations and logical arguments. Personally I don't have lot of respect for current tax system.