IMO, you are just fishing for loopholes so they can keep bypassing sales taxes. If they are going to set up lots of distribution centers and compete more directly with local retailers, don't you think they should lose that loophole and compete on an even playing field? Part of the Free Market Economics you mentioned before is having a level playing field with no competitor being given preference.
I already pay sales tax for any internet purchase from a Texas company. I would expect to pay that to Amazon also if they move back in state.
No, you're wrong. I am trying to point out that nailing down what is an "in-state transaction" is not cut and dry. If we base it on distribution center location, then it will create a game of buying items online one state over.
An example based on distribution center...
I'm in Peoria, IL. I will buy from Amazon shell company (OR COMPETITOR) Amazing Iowa to get the 10% sales tax discount, shipped from the distribution center in the quad-cities.
Folks in the quad-cities can buy from Amazon shell company (or competitor) Amazonian Illinois to get their state sales tax discount, shipped from the Peoria distribution center.
Nailing down an "in-state" transaction is going to be a sticky point.