Taxing Digital Sales Raises Concerns About ZIP Codes, Privacy

Online shoppers in the US often skip providing their full names or addresses when buying digital products such as e-books or video games. It’s a common oversight, as not all retailers require this information to complete purchases, but it can wind up creating challenges when it comes to collecting and remitting sales taxes.

The rise of digital goods—including games, movies, music, and non-fungible tokens—has led to tax-sourcing issues, particularly when retailers use payment platforms that don’t collect all the customer information necessary for tax calculations. A particular pain point comes when sellers only collect a customer’s five-digit ZIP code, rather ...