Both the state actions and those of the large retailers with associates all seem quite petty and desparate. But that is due to the fact that the sales and use tax system today has problems. These include: - E-commerce makes it easy to have operations in few states and customers in all states. Having a physical presence in few states means states need to rely more in their citizens voluntarily paying their use tax. States have done a poor job of educating citizens about use tax - most people don't know what it is. Why don't states run pop-up ads on the Internet? Why don't they send letters to individuals with income over $100K who left the use tax line on the state income tax form blank asking questions about why it was blank? - The sales tax is complicated. The tax base and rates vary from state to state. Even with the Streamlined Sales Tax model law, a state can still have multiple rates within the state. In California, these local rates can easily change during the year as voters enact 1/4 and 1/2 cent tax increases to pay for transportation and other activities. Vendors track all of this by software - but it is expensive and the software only operates with human beings. States should move to having just one rate in their state. - Technology doesn't seem to be used to help enough in sales tax collection. Online sales are usually via credit card or paypal? Why not have states add a link to any e-commerce site that enables them to charge the sales tax at the same time. It can be done in various ways that prevents the government from know what you purchased. This technique would prevent customers from having to track use tax purchases and would get funds to the states immediately when the purchase is made. I think it is interesting thay many affiliates are asking their legislators not to enact "Amazon" tax laws like New York did in April 2008 because they know Amazon will cancel the agreements and they make money from these arrangements (which do seem like advertising to me, not sales representation). What seems interesting is that some of these affiliates are entities that would benefit if Amazon did volunarily agree to collect the sales tax. These include entities connected with public schools, like PTAs. Why don't they put pressure on Amazon and other vendors that they want them to collect the tax? Why not also put pressure on states to move to one rate per state. I'm afraid states are losing time and money trying to pass laws that don't address the entire problem and are too easy for vendors to avoid (such as be canceling associate agreements). Time would be better spent getting to one rate per state, educating citizens about the use tax and looking for technological solutions - after all, this is the 21st century. I've written about this topic a few times: http://21stcenturytaxation.blogspot.com/