A few moments ago, there was a knock on my door. It was a delivery from Amazon.com. My daughter’s 5th-grade class requires that students get their hands on the book, Al Capone Does My Shirts by Gennifer Choldenko, this semester for classroom reading. The book was published in 2006 and I assumed it would not be lining the shelves of our small, local bookstore (where I try to shop wherever possible) so I did what many parents did and one-clicked my way over and bought it at Amazon.
The book was delivered in two days. That was a big relief since my daughter, who is a bit of a Nervous Nellie when it comes to maintaining her straight-A record, was worried that she might not have it by the September 14 deadline – and no, I wasn’t willing to pay for overnight shipping. But next year, I might not have to.
You see, Amazon could be changing the way that it does business – thanks to the very thing it’s being railing against for years: state sales tax.
This month, Amazon began collecting sales tax on purchases made by customers in more states than before, including my own state of Pennsylvania. Amazon had previously taken the position that it was not required to collect sales tax, even entering into agreements to make that the law (albeit temporarily in some places). Over the past year, states – perhaps responding to a tougher economy – started saying no to Amazon. And when Amazon put up a fight, courts agreed, in most cases, with the states. This put Amazon into something of a quandary: stand firm and fight or accept the inevitable. They chose the latter.
Even though Amazon had portrayed the encroachment of local sales taxes as a death knell, it appears that it has actually presented them with an opportunity to become even more Amazonian: more locations. Amazon’s CEO, Jeff Bezos, has figured out that if the company is going to be subject to sales tax anyway for having a presence, why not have a bigger presence? And so the building begins.
The result of all of these centers? You guessed it: faster delivery.
Amazon is clearly hoping that the lure of super fast delivery will make shoppers forget about the loss of the edge that Amazon swears it never really had by not charging sales tax. In recent years, Amazon has shown support for a more streamlined sales tax system on the federal level even as those of us in the tax world cringe at the thought of Congress trying to streamline anything tax-related. Whether these concessions (and yes, I see them as concessions) will mean that Amazon continues to support such efforts is anyone’s guess.
For now, online sales are becoming increasingly subject to sales tax from all retailers from Macy’s to Zappos. I don’t think that will affect customer sales: I’ve always maintained that I think customers care more about service than sales tax. What do you say?
