Part of what they are doing is getting the system ready to put a sales tax on services. That will generate some serious revenue (or provide another effective mechanism to steal money from some people to give to other people, depending on your perspective.)

Aren't services already covered by most states' sales taxes? I paid sales tax when I got my oil changed recently, and my VPS provider charges sales tax if I'm in the same state.

No. There are exceptions, usually made to extract revenue from particular services, sometimes targeting people that don't live in that locality, like hotel taxes, but very seldom do they tax things like attorney services (wonder why...) or software development.

NYC has a weird list of services. http://www.nyc.gov/html/dof/html/business/business_tax_nys_s... The Texas list is more comprehensive, and includes web site creation http://www.window.state.tx.us/taxinfo/taxpubs/tx96_259.html

This is also an option that would be useful in creating a VAT, if the government has access to all of these transactions. Sadly, the states already tax most of this money and it would look bad to have Feds move in there. However, the gap in service taxes would appear to be an opportunity, especially in B2B taxes which would be invisible to most people.

>if I'm in the same state.

And that happens what, 8% of the time? Most online services are evading sales tax.

Sure, but that's not specific to the service/goods split is it? That's basically Amazon's business model with physical goods as well.

Hell, if you're in Washington, Amazon will ship from an out-of-state warehouse so that you still don't have to pay.

It doesn't matter where the shipment is from; if the business has a point-of-presence in the shipped-to state, they charge you sales tax for that state. For instance, I bought some stuff at the Pendleton store in Portland, Oregon, and had it shipped home to Illinois, and the clerk (very apologetically) told me that he'd have to charge me sales tax since Pendleton owned stores in Illinois. This despite the fact that I was physically in Oregon, the sale was taking place in Oregon, the blankets were still in Oregon, and Oregon has no sales tax at all.

I'd rather pay the 9% to support local services and get my packages a bit earlier.

Wow. Jump to conclusions without evidence? Sign me up!

More likely it was an attempt to close a perceived tax loophole without understanding of the cost of compliance. I have no doubt it will get fixed before it actually goes into effect.

What is your basis for optimism?

Logic?