The slaughter house pays no sales tax when buying cattle, the breeder doesn't either. The scrapyard pays no sales tax when paying for scrap. I pay no sales tax if I go to a yard sale either. Sales tax is not collected for a myriad of cash transactions because they are not retail sales, not because people are cheating.
I am aware of this, as I imagine others are...if for simplicity we can just assume anytime someone uses the word "sale" they are referring to a retail sale, not a resale, that may make things clearer...
http://www.investopedia.com/terms/s/salestax.asp
The definition of a sales tax, according to investopedia, is "A tax imposed by the government at the point of sale on retail goods and services. It is collected by the retailer and passed on to the state."
I looked at a variety of definitions, though I felt this one was best...almost all the definitions mention that the tax is collected by the seller or retailer...about half the definitions mention a phrase similar to "at the point of sale", though none seem to be more detailed than that...
So, I looked up "point of sale", or POS...
http://www.investopedia.com/terms/p/point-of-sale.asp
The definition of POS, again according to investopedia, is "The place where sales are made. On a macro level, a point of sale may be a mall, market or city. On a micro-level, retailers consider a point of sale to be the area surrounding the counter where customers pay."
I looked at some other definitions...most are not as detailed, but all make it very clear that the point of sale is physical location of the sale...not just location, physical location...
That makes things rather tricky for online purchases...if you look up "online point of sale" or "virtual point of sale", the "point of sale" almost always refers to the program, application, or terminal that does the transaction...I will combine this observation with the general accounting practice of considering a merchandise sale as complete when the title for the merchandise exchanges hands from seller to buyer...these two observations suggest that the actual electronic device used in making the purchase would be the "point of sale", for it is that device where the transaction occurs, the purchase is confirmed, and the buyer is given their proof of purchase (exchange of the "title")...
As far as I'm concerned, if I purchase something online, then that physical location is the device or terminal I use to make that purchase, wherever that location is...the distribution center should not be the point of sale because the buyer does not partake in any exchange of "title" or receive a proof of purchase at that location....