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Oh, lookee here, another one!

http://www.zip2tax.com/

So let's continue to freak out about the complexity of a problem that has already been solved.

Why should somebody in another state have to keep track of the tax laws in every municipality in every state in the country?

They don't need to, this problem has already been solved:

• http://www.taxrates.com/
• http://www.taxdatasystems.com/
• http://www.zip2tax.com/
• https://www.google.com/#hl=en&q=sales+tax+database

I have customers that use these vendors for taxes as well. The software I work on at my day job integrates quite nicely with these:

• http://taxware.com/
• http://www.vertexinc.com/

Are you kidding me? I'm sure there are several companies that will license use of their service to others. A simple API in your checkout form could call the service and get the tax rules based on zipcode. Heck, there are several free websites that offer this service for manual entry, I can only imagine that there are some that will allow automated entry for some cost structure. The more important thing is not calculating collection of sales tax, but delivering the sales tax to the proper places. If I sell a widget to a man in California, do I have to mail a check to the California IRS? How often do I have to give the sales tax money to these states? If Paypal or some payment processor took care of this for you, it would be quite easy for them to do so. They could immediately take the sales tax from the transaction and place it into a massive account. The money could then be electronically distributed the the correct parties on a daily/weekly basis. Maybe they would charge something for the service, but my guess is that it would be minimal if not free.

It sounds like your employer is an idiot. Sorry.

http://www.zip2tax.com/z2t_Services.asp

Are these guys [zip2tax.com] full of it?

No, but they actually support the person you are replying to. If you read their FAQ, it says:

Do tax jurisdictions match up with ZIP codes?

Sometimes tax districts are based on factors other than ZIP code. There are a few locations within certain states that have more than one tax jurisdiction for a single ZIP code. This can make it tricky to determine which rate to use based solely upon the 5 digit ZIP code.

We’ve made it possible for you determine which rate to use by providing multiple results for these locations. Zip2Tax default result is the municipality that is home to the U.S. Post Office – in the Tax Tables, this location is denoted with a "1" in the Primary Record column. The other rows for that ZIP code show all of the other communities sharing the same ZIP code.

You can manually select the row with the closest city and special district match, or, if you are a Database Interface or Tax Tables subscriber, you may be able to program your systems to automatically make the match.

Tax rates don't follow zip codes at all. A given taxing area may span multiple zip codes, and a zip code may (and probably does) cover multiple different tax areas.

I'm sure there may be a tax area that spans multiple zip codes but that's not really an issue. But do you have an example of a zip code that covers multiple different tax areas? If so, how is the area and jurisdiction defined? Are these guys full of it?

http://www.zip2tax.com/z2t_services.asp

Looks like someone already does this for about $1100/year -- and that was just the first Google hit.