You need to register in a state before you are approved collect and pay sales tax. They will give you a tax registration number. Just because you have inventory at an Amazon warehouse does not necessarily mean you fall under the Nexus rules. This is why you need to discuss it with someone who is versed on e-commerce law.
Sales tax is collected by Amazon (CreateSpace) from a list of states that you can see on their website. Since they are the once collecting the sales tax, you are correct that they pay the sales tax collected. As for income taxes, you need to report your royalties from your 1099 on your tax forms.
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