If Amazon has a real physical presence (like warehouses) in Texas then they should pay the sales tax. If they don’t they shouldn’t. Much as I hate to say it, it sounds like the Sate of Texas has a good case. This dispute doesn’t hinge on whether an out of state retailer should pay taxes. As a commenter said earlier, if an out of state online store should pay taxes, why then EVERY physical store in the US should be checking the ID of EVERY customer and be forced to remit sales tax to other states if their residents are buying goods or services outside their home state. How would you like that, Walmart?