The distribution facility locks Amazon into a bona fide physical presence, obligating it to collect California sales tax regardless of the Amazon tax.
FORBES: Why You'll Soon Be Paying Sales Taxes on All of Your Internet Purchases
To do so, Amazon will rapidly and dramatically expand its network of distribution facilities, which ensures physical presence in those states and makes the Amazon tax in those states irrelevant to it.
FORBES: Why You'll Soon Be Paying Sales Taxes on All of Your Internet Purchases
Amazon Tax: Good, Bad and Ugly.
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He adds that his study finds that if the Amazon sales tax advantage goes away, Amazon Prime members would pay a modest premium to Wal-Mart store prices and about the same prices as Target customers.
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This seems largely to exempt online-only retailers such as Amazon from tax collection.
The boost soon tails off and is now mired in the Amazon sales tax debate and its Cloud failure.
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Despite its no-tax past, Amazon now supports nationwide sales tax rules, while Overstock stopped its New York affiliate program.
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In other words, if the feds decide to move ahead on a national sales tax law or any other strategy that would subject Amazon to online sales tax in California during the moratorium, the deal is off.
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Amazon collects sales tax in California, Kansas, Kentucky, New York, North Dakota, Texas and Washington.
Currently, Amazon collects sales tax on shipments to residents of only five states.
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She was harsh with the North Carolina lawyers, saying it was unreasonable to expect Amazon to trust tax commissioner Kenneth R.
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Amazon Strikes Texas Tax Deal While Illinois Tax Goes Down.
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Illinois Governor Signs Amazon Internet Sales Tax Law.
FORBES: Tax Alamo? Amazon Strikes Texas Tax Deal While Illinois Tax Goes Down
Amazon already collects sales tax in Kansas, Kentucky, New York, North Dakota, Texas and Washington.
FORBES: Californians Rush To Buy Online Before Amazon Tax Hits
This month, Amazon began collecting sales tax on purchases made by customers in more states than before, including my own state of Pennsylvania.
FORBES: Amazon Sees Silver Lining With Sales Tax Collections
But the William Blair study concludes that even if it has to cough up more tax, Amazon will still be able to offer prices that are lower than many rivals'.
Two other multinational companies which have also been criticised for paying too little corporation tax - Amazon and Google - both said they would not be following Starbucks' voluntary contribution lead.
And Jon Hurst, president of the Retail Association of Massachusetts, that is pushing to impose a 6.25% sales tax on Amazon purchases in the State, argues that the Supreme Court decision happened before e-commerce took off.
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While Mr. Bezos expressed a willingness to collect sales tax where Amazon has a physical presence, the company recently pulled plans to open distribution centers in South Carolina when it was unable to get legislation passed that would exempt it from doing so.
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Amazon is currently collecting sales tax for purchases shipped to nine states.
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Given that it would not abolish what Amazon is doing therefore what Amazon is doing cannot be tax avoidance.
Admittedly, as an online outfit Amazon does not pay sales tax in American states where it has no physical presence.
For a cash tax rate Apple was the second lowest with a 13% cash tax rate with Amazon at 4% and Oracle at the high-end at 25%.
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Note that the subsidiary that developed the Kindle e-Reader, Lab 126, is based in Silicon Valley but Amazon did not collect sales tax in California until September 2012.
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It is interesting to see that while Amazon reports a 25% tax rate on its income statement that it has only paid a 4% rate in cash payments.
And by January 1, 2014, it has agreed to collect taxes on items shipped to the 49 million residents of Connecticut, Indiana, Massachusetts, Nevada, New Jersey, Tennessee and Virginia, meaning more than half of Americans will be charged tax on their Amazon purchases.
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Compared to the income and general sales tax hikes, the Amazon levy is penny ante stuff.
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But Amazon.com only collects sales tax on shipments to Kansas, Kentucky, North Dakota and Washington.
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