I think I get it - you are satisfied as to the viability of the business because you already have the product (or have a regular supplier confirmed) and you know your target market want it and will pay for it through a membership arrangement.
You will be a middle-man. You will be purchasing in bulk from a supplier, then supplying it individually to your members, not as a sale but as a benefit of membership. You will pay the sales tax on your bulk purchase and thus, you feel, not be required to charge sales tax again to your members.
If this is to be large-scale, I would suggest you contact a tax attorney in each of the jurisdictions in which you intend to have members. Because - the individual state laws may feel that you are still "selling" the product and they may still want their tax cut. Never mind that you have already paid sales tax to your state taxing authority, they still want theirs.
If this will remain small scale, it might not matter. Your logic is sound, as far as logic goes, but the law isn't always logical (said as a non-lawyer.)
Last edited by Spider; 21st September 2011 at 09:40 AM.