This is not entirely accurate. The reason they stopped selling the literature is because their attempt to affect the outcome in Jimmy Swaggart Ministries v. State Board of Equalization (by filing an amicus brief in that case) failed. Based on that ruling, the WT would be required to collect and pay sales tax on all sales of its literature. This would be extremely difficult due to the number of "publishers" and the need to train them regarding their responsibilities in this regard. Additionally, the tax filing requirements would be quite onerous for an undertaking of this level.
The fact that someone is selling the WTS literature to the public does not, in any State that I am aware of, result in the conclusion that such individual is an "employee" for purposes of determining whether vicarious liability can be attributed to the Watchtower solely on the basis of that fact. However, this fact can be combined with other facts to make an argument, and then it's up to the courts.
Well, the WTS would have two basic choices:
- Have each and every JW register their own charitable organizations and tax IDs. This will result in what you described, a logistics nightmare. It would also create a double tax. First the WTS will be taxed when it sold its literature to all of the individual JW charitable organizations and then all of the JW charitable organization would have to tax the people they resold the literature to. This would end up causing the price of the literature to be substantially higher than it is now (suggested donation amount).
- Hire all of the JWs as employees who will then sell the books for the WTS just as an employee at Barns and Nobel hires employees to sell books. This will result in the legal liability I described earlier. The WTS will do everything in its power to avoid this situation because it knows that it is currently dodging a very large number of lawsuits that would otherwise financially cripple it.