Tax/Reporting Customer Pick Up and Ship-to address

Question

How have you seen customer pickups handled for sales and tax reporting? 
In one case, I've seen answers that it is common business practice to leave the ship-to address as the customer address that is the ultimate end destination (example Ontario, Canada), rather than where title passes at the pick up/ship-from location (example Michigan, US).  One rationale is that the sale is to the customer at the end destination (for sales reporting and other purposes) and another is that customers' use their invoice for export and foreign tax purposes (when transporting goods across international borders) to prove where the product will ultimately go.

Answer 1

The situation is actually more complex than Shel indicated.  In some US states, different items are taxed at different rates for all customers (e.g., food vs non-food items), or may be taxed differently for different customer types (e.g., a customer that is a manufacturer may be taxed at one rate for capital equipment, another rate for tools, and not at all for raw materials, while a different customer may be charged at the same tax rate for all items).  If a customer sells in multiple states, they have to accomodate all of these rules.  What is needed is some kind of reference for taxing by item group/customer group/ship-to address.  It should be optional, but if used it should override the normal tax code functionality.