Sales tax laws vary significantly from state to state. If I order from walmart.com and pick it up in the store, I pay sales tax. Tennessee law requires that if the internet merchant has brick and mortar stores in the state. Lugh's example indicates Virginia's laws are different.
When Amazon opened fulfillment centers in Tennessee several years ago, they reached an agreement with the state to begin collecting sales taxes on shipments to Tennessee residents in 2014. In the interim they have been providing customers in the state an annual report of purchases, so that taxpayers can remit the taxes due directly to the state.
I'm geared up for the change in the law. It will level the playing field. I expect Amazon will still beat local merchants on price more often than not. I will continue to make purchasing decisions on a net/net basis comparing the total price including taxes and shipping charges. Just this week I purchased a tablet for my wife from an Ebay merchant, not because it was sales tax exempt or shipped free, but because the price was $50 less than Amazon or Best Buy.
The change will present one headache for online merchants due to varying state laws. Not all classes of merchandise are taxable in every state. The exemptions are all over the lot. A GA Premium Membership would not be taxable to a Tennessee resident, but would be to members in some other states.
So, the level playing field will be a little bit rocky.