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Amazon's sales impacted as states introduce online tax

By Justin Kahn ยท 8 replies
Apr 22, 2014
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  1. In some states across the US, Amazon holds a distinct competitive advantage over brick and mortar retailers, in that it's able to offer its goods without sales tax. Now that more states are beginning to require the company to charge...

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  2. gamoniac

    gamoniac TS Evangelist Posts: 358   +102

    I wonder who are these analysts, and what are their reasoning. Many people that I know, including myself, order online primarily because of the sales tax exemption. Besides, as the article points out, there is a 24% drop in sales of items over $300.

    This has got to be one of the top 5 risks to Amazon's business.
  3. captaincranky

    captaincranky TechSpot Addict Posts: 14,963   +3,999

    I don't buy anything from Amazon I don't have to anyway. The added sales tax just reinforces my position.

    In the product categories in which I'm normally investing, there are so many other better outlets anyway.

    Once a year on Black Friday, I make a pilgrimage to Best Buy in Delaware, (no state sales tax), grab a bunch of loss leader items, and get the hell out of there before they figure out what happened.

    Any item more than about $100.00, makes it worthwhile for me to travel to Delaware to buy it. So, gas costs aside, you get your item on the spot, and either break even against the fuel, or save quite a bit after about $200.00.

    So, in no particular order, Newegg for computer parts, Adorama or B &H photovideo in NYC for cameras and some audio items, Musician's Friend, zZounds, and Sweetwater for musical instruments and related equipment. And lastly, Adirondack Guitar, for left handed guitars. These are all reputable eTailers, with toll free ordering as well, and all have some type of free shipping available. Walmart has "ship to store (free)", and a vast product array also.

    Where Amazon does excel, and their 3rd party suppliers, is DVD &Blu-Ray, CDs, and Mp3 downloads. It would be too long a story to go into how to get the best deal in those categories, so I'll spare you the details.

    Off the top of my head, I would swear Amazon charged me tax, on a non-taxable item. I can't remember what that was, so I guess it really didn't happen.

    I'm "fortunate" enough to live in the big city, so auto parts, groceries, and the staples of everyday life, are easily in reach. Don't need the big "A" for those things.

    And remember boys and girls, just because Amazon sells it, doesn't in any way shape or form, mean that you're getting the best price, So, shop wisely, grasshoppers!
  4. Teko03

    Teko03 TS Evangelist Posts: 575   +297

    I just purhcased a digital camera for my neice from Amazon. Didn't even consider buying it in-store. At $179.99, I just saved $14 buy not paying any taxes. You can't really believe that tax-free isn't a factor in opting to purchase from Amazon.
  5. Renrew

    Renrew TS Enthusiast Posts: 253   +19

    "And remember boys and girls, just because Amazon sells it, doesn't in any way shape or form, mean that you're getting the best price, So, shop wisely, grasshoppers!"

    How true, Amazon's prices have steadily crept upwards in the last few years, while their quality control on non branded items has suffered as well. The addition of sales taxes, because of adding a warehouse in my state, plus their minimum $ 35,00 purchase for free shipping, have made it a non competitive store for me.
  6. Whoever came up with the phrase, 'brick and mortar store', must be the same ***** who started the term, 'baby bump'.
  7. cmbjive

    cmbjive TS Booster Posts: 777   +139

    Of course they didn't. The entire purpose for brick and mortars to want online sales to be taxed is out of envy.
  8. Scshadow

    Scshadow TS Evangelist Posts: 566   +206

    They should just get rid of sales tax anyway. Its just double dipping. Income tax, sales tax. Choose one dammit.
  9. captaincranky

    captaincranky TechSpot Addict Posts: 14,963   +3,999

    (Roger Waters, From "The Wall").

    The state of Delaware, has no retail sales tax! But, their personal income tax is, (or so I've heard), "oppressive".

    They maintain the no retail sales tax policy, to draw people from the 2 neighboring states, (PA & Maryland), injecting big bucks into their economy.

    In my area, the biggest taxation offender is the City of Philadelphia. (8% retail tax, vs. 6% for the rest of the state). This is because nobody has a job, and since they're mostly busy selling drugs and procreating, the school district is always begging far and wide for funding. Additionally, their offspring are, more often than not, classed as, "special needs". Which increases the public funds allotted to them, and helps politicians get elected on the, "look how much I've done for these useless kids", platform. So, the big double dip comes from across the state, the fed, plus our illustrious mayor has just summarily raised the real estate assessment of every property in Philadelphia.

    So, school taxes, come from many sources already, and hence large population centers do indeed "triple dip for funds. That said,, serial taxation from multiple sources, isn't going away anytime soon..

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