Infinut is based in Washington State. Turns out Washington state is one of the few states to tax sales of digital goods - and that includes Kindergarten Math.
10 days after posting Kindergarten Math for sale, I got a call of Washington department of revenue. I had made all of $10 or so at this point. It was a bit pre-mature. But, since then, I have been researching the Washington state tax rules. Here's what I have found so far.
Retail sales within the state of Washington by a Washington state company are taxable for B&O tax (~0.5%) and Retail tax (6.5%). I had 2 sales in Washington in Dec - $1.98 which I must report on the company's state tax quarterly return. Google market provides information about the state where the sale happened, so I can figure out which ones are in Washington. It also allows me to set tax percentage for the state, so, buyers are charged Retail tax if they live in Washington.
Amazon market does not provide detailed information about the sales. Also, they make it clear that what they are paying us is royalties. Royalties are taxed via B&O tax (~0.5%) in Washington state, so, I will report all amazon sales of Kindergarten Math as such.
I am still not sure if the city also charges retail tax on digital goods. It will be time to call the Department of Revenue at tax filing time to verify that I got it right the first time.
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