Print 15 comment(s) - last by Jaybus.. on Jan 21 at 4:16 PM

Sellers in the state of California, where sales tax is collected, were down over Q4 2012

Research suggests that Amazon may have taken a sales hit over the holiday period after collecting sales tax in certain U.S. states.

While the real results of Amazon's online sales during the holiday season won't be revealed until January 29, e-commerce firm ChannelAdvisor has given a small glimpse at its research, which took a look at the sales figures of its clients (third-party sellers on Amazon) over the holiday period in California and compared it with other states where Amazon doesn't collect sales tax.

Amazon started collecting sales tax in Texas in July 2012, and California and Pennsylvania in September 2012.

In California, specifically, Amazon started collecting a sales tax of 7.25 percent to 9.75 percent. ChannelAdvisor found that its client's sales on Amazon before sales tax collection in California was 5 to 10 percent above other states. The week before the e-tailer began collecting taxes, sales jumped 70 percent compared to other states.

After the sales tax collection began, sales in California matched those of other states. In early November 2012, California sales fell 10 percent below sales in other states.

The busy period of the holiday season, which is late November and early December, saw lower Amazon sales in California compared to other states as well, although ChannelAdvisor didn't provide exact numbers. However, at the end of the holiday season, sales came back up a bit.

According to Thomas Reuters I/B/E/S, Amazon is expected to report a revenue of $22.3 billion at 52 cents a share for Q4 2012.

While Amazon sellers saw a drop after tax collection, Best Buy was reaping the benefits. In California, Pennsylvania and Texas, Best Buy's online sales jumped 4 to 6 percent over the holiday season compared to other states. It also saw a 6 to 9 percent increase in online orders that are picked up in-store within those states.

Amazon fought a long, hard battle against several U.S. states back when it didn't collect sales tax (except in Kansas, Kentucky, New York, North Dakota and Washington). The e-tailer fled many states that attempted to force tax collection on the company, such as California and Illinois. Amazon has said that it does not have to collect sales tax because of a 1992 Supreme Court decision that excuses Amazon and other remote sellers from having to collect taxes in U.S. states that do not have the company's employees or warehouses operating within those states. But between states looking for ways to offset large financial deficits and brick-and-mortar stores like Best Buy complaining about Amazon being unfair competition, the issue swelled.

Amazon CEO Jeff Bezos said many times that his company would agree to collect taxes if there were some sort of federal legislation.

Amazon finally broke down and started collecting sales tax in certain states, which allowed it to build more distribution centers within those states. For instance, Amazon announced that it would collect sales tax in New Jersey last May so that two Amazon distribution centers could be built.

This led to faster shipping for customers, such as Amazon's same-day delivery program, making it more competitive than ever (especially since it still had cheaper prices than most brick-and-mortars).

Source: Reuters

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One important fact you missed
By augiem on 1/17/2013 3:56:01 PM , Rating: 5
While Amazon sellers saw a drop after tax collection, Best Buy was reaping the benefits. In California, Pennsylvania and Texas, Best Buy's online sales jumped 4 to 6 percent over the holiday season compared to other states. It also saw a 6 to 9 percent increase in online orders that are picked up in-store within those states.

Don't forget that Best Buy offered price matching with Amazon for the holidays. Suddeny, for those of us in CA, it was a no-brainer. Find the item on Amazon, then run down to BB and PM it and save the hassle of shipping. All the sudden Best Buy was THE place to shop for savvy shoppers who hadn't spent a dime there in a decade because of their inflated prices.

RE: One important fact you missed
By jimbojimbo on 1/17/2013 5:33:24 PM , Rating: 2
Was that just a temporary thing? I'd like to see the sales numbers if it wasn't.

I live in Chicago and if Amazon started collecting state sales tax it would still be a lot cheaper to just order from Amazon and avoid the county and city taxes.

RE: One important fact you missed
By augiem on 1/17/2013 6:05:48 PM , Rating: 2

"Valid for purchases made between October 7, 2012 - November 17, 2012 and November 27, 2012 - January 31, 2013. Best Buy may amend these terms at any time. All other terms and conditions of the Best Buy Price Match Guarantee apply."

RE: One important fact you missed
By fic2 on 1/17/2013 6:17:14 PM , Rating: 3
Target has said they will price match Amazon:

RE: One important fact you missed
By ClownPuncher on 1/18/2013 1:02:35 PM , Rating: 2
I found the support of that to be spotty. Best Buy was definitely not honoring it on everything.

RE: One important fact you missed
By phazers on 1/18/2013 6:49:56 PM , Rating: 2
I haven't shopped at Bust Bye ever since I discovered they were falsifying their own Internet site with a special intranet site with higher prices. I actually had to go home, print out their website prices for a new TV and BD player, drive back to the store and confront the salesdude vis a vis the intranet site with prices several hundred dollars higher.. I got the stuff at the lower price and then told them I'd never be back..

RE: One important fact you missed
By wordsworm on 1/19/2013 2:17:11 AM , Rating: 2
I thought everyone had a smart phone these days.

RE: One important fact you missed
By Jaybus on 1/21/2013 4:16:02 PM , Rating: 2
You call them smart phones. I call them half-wit phones.

By MadMan007 on 1/17/2013 3:41:39 PM , Rating: 3
That's strange, because third party sellers actually don't collect sales tax from sales made through Amazon. They still go by the old 'report your use tax' system. Only sales made directly by '' are assessed sales tax at the time of purchase. Being in one of the newly taxed states I know, I wonder if people just assumed and didn't attempt to make purchases instead of actually looking at the details of their invoice.

RE: strange
By EricMartello on 1/17/2013 10:58:35 PM , Rating: 1
Even so, if people know (or think) that the prices at their local BB are the same as Amazon's fewer of them are going to be shopping online in the first place. Amazon's prices are not rock-bottom anyway and the prices set by 3rd party sellers are usually not the best deal since they gouge on shipping. Amazon in general has a lot of good deals and fair prices.

I'll often pay a bit more to shop at Amazon simply because they have a solid return policy and with prime I get free 2-day shipping on pretty much everything. When it's a matter of saving a few hundred bucks over Amazon's price I will go elsewhere.

Amazon WIMPED out!
By Pneumothorax on 1/17/2013 6:13:33 PM , Rating: 3
Really wish Amazon kept to their original plan of taking on Gov Brown and defeating this tax initiative. They had the votes based on polling and gave up anyway. Well, as the above posters said I just PM with BB this past holiday season and let my now worthless Prime membership expire. Now I get all photo equipment from NY merchants who still thankfully don't charge ST. Screw the stupid voters and welfare types here in CA who decided to raise my income taxes!

sales are down
By Shadowmaster625 on 1/18/2013 8:59:21 AM , Rating: 2
But the public employee pensions are up! Gotta keep finding ways to pump up those 6 figure pensions!

By ERROR666 on 1/18/2013 1:38:54 PM , Rating: 2
What is this obsession with Amazon? When was the last time you compared Amazon prices with some other e-tailers and retailers? I usually do this when buying and lately I find that Amazon's price is one of the highest. At least on the stuff I'm buying. overstock, newegg, etc are usually much better.

Amazon Pricing
By musicman89503 on 1/19/2013 1:24:49 AM , Rating: 2
I live in Northern Nevada. I've been purchasing through Amazon for years. A recent purchase of mine a Sony DSC-H30V I bought for $298 no shipping no tax. The same camera costs on upward $100 or more in a Brick & Mortar.Special price of course. The thing is, I do my homework before I buy. I check out the specs, I check out the reviews of not only the item, but the seller as well. Price is always one of my first, if not the first priority after the above mentioned. Set a budget on what you want to buy and stick to it. It saved me over $100.

it's CA
By inperfectdarkness on 1/18/13, Rating: 0
"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007

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