Amazon has 33k employees [1], estimated; they can figure it out. Also, I'm positive there's at least one company selling such information -- thousands of other retailers, most much smaller and much less technically sophisticated than Amazon, still manage to make it happen. This is an idiotic excuse.
Actually, I'm pretty sure you're wrong about companies selling this information. Smaller retailers manage to avoid this hassle by... not having to pay sales tax for out-of-state purchases.
That might be whats behind Amazon's change of heart. This will be difficult for them, but its probably impossible for smaller retailers. It might be expensive in the short term, but it protects them from competition in the long run.
I think GP was suggesting that there is at least one company selling software that will allow you to compute sales tax on an order, not that companies are selling their order book to states for the purpose of use tax enforcement.
Yes, Amazon does. But if it applies to Amazon then it will apply to all the other smaller internet retailers as well. The historical precedent was that it creates an undue burden on said retailers who have to collect such a tax. It's not an excuse, it's a Supreme Court ruling.
So your solution to the problem of there being hundreds of thousands of potential tax rates for every single item is to require everyone selling anything online to pay Thomson Reuters for a subscription to their database?
Or one of their competitors, yes. Or figure it out themselves. Thousands of retailers from JC Penny to Sears to B&N, etc etc, figure it out. Also, you'll note that all online business already do this for the state in which they're located (with the exception of states that don't charge sales tax, but those are relatively few), so businesses can clearly do it. 50 states instead of one is a minor matter of scale, and is no more complex than figuring this out for one state. Which they already must.
Also, if Reuters has excessive profits, someone will probably make a competitor. That said, it's basically a solved problem, except when companies want to hand wring their way out of paying taxes.
BTW, don't be ridiculous about "hundreds of thousands". Unless you mean thousands. Even TR in their sales literature only mentions 13k tax authorities [1]
[1] http://en.wikipedia.org/wiki/Amazon.com