This still puts domestic sites at a significant disadvantage.

I believe Temu/Shein/etc collect US sales tax based on the destination address, but that is insufficient.

You don't have to pay a company to calculate it for you, but it is difficult to calculate. I think all the states with sales tax assert that the correct sales tax for a delivered item is based on the location of delivery, and determining the tax jurisdictions from the location of delivery is complex. Using the city field of the address is often wrong, because that's really just the name of the post office that serves the delivery location, not an indiciation of what city (if any) the delivery location is in.

Once you've determined the jurisdictions, you also need to confirm the rates for the shipped items and collect and remit the taxes.

It's a lot harder than schemes where there's a single rate for a country or at most one rate per top level subdivision of a country, where delivery addresses almost always have the subdivision clearly marked.