Does tax apply to items downloaded NOT shipped? (Score 2)

Does the tax apply to items that are not shipped - but just downloaded like software packages? If so then a perhaps unintended consequence will be to move that software store offshore. I my software store is located in Albania, but I reside in Arizona and pay Fed / State taxes there - do I have to collect this tax Similarly, if I have a site which sells my photographs, were people use a credit card or pay pal and then download the digital image, can I avoid collecting the tax if I move the hosting of the site outside the USA? I am reminded of the idiocy around encryptation software many years ago were there was legislation forbidding its exportation - so over a short period of time all of the production of encryptation software moved offshore as it was not illegal to import it rick [e-mail]