Third-Party Sellers on Amazon See Holiday Sales Dive Following New Tax Rules
January 17, 2013 3:00 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
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).
"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook
Amazon to Offer Same-Day Delivery, Could Pummel Brick-and-Mortar Retailers
July 12, 2012, 12:33 PM
Amazon to Collect Sales Tax in New Jersey Beginning July 1, 2013
May 31, 2012, 3:31 PM
Amazon to Collect Online Sales Taxes in Texas Starting July 1, 2012
April 30, 2012, 10:34 AM
Amazon Asks California Voters to Repeal New Sales Tax Law
July 12, 2011, 1:18 PM
Amazon CEO Calls State Tax Demands Unconstitutional
May 18, 2011, 10:27 AM
Science & Environment
February 20, 2017, 6:37 AM
The USA’s newest weather satellite sends first photos.
January 24, 2017, 6:41 AM
Netflix took a decision to invest in original content
January 19, 2017, 7:00 AM
Amazon Airborne Fulfillment Center – Your Merchandise Drop-Shipped from the Clouds
December 29, 2016, 5:00 AM
Amazon is experimenting with a new kind of grocery stores, Amazon Go
December 8, 2016, 5:00 AM
Google has developed Deep Learning Algorithm to detect Diabetic Eye Disease
December 4, 2016, 5:00 AM
Most Popular Articles
What is the Apple’s iPhone 8 specifications and release date?
April 14, 2017, 5:43 AM
Meet the Smartphone with four cameras - Alcatel Flashphone
April 5, 2017, 11:20 AM
Vivo V5 Plus – the Selfie Softlight is on You.
April 17, 2017, 7:05 AM
Moto G4 Plus - Powerful Unlocked Convenience
April 12, 2017, 6:25 AM
Microsoft releases details of Project Scorpio console
April 7, 2017, 7:50 AM
Latest Blog Posts
Link your Brain to Your Computer – In Four Years…Maybe
Apr 22, 2017, 7:03 AM
Google Home can now identify users by their voice.
Apr 21, 2017, 7:15 AM
Amazon Lex – Now Available for Developers.
Apr 20, 2017, 6:58 AM
You can now use Instagram offline on your Android Smartphone
Apr 19, 2017, 8:00 AM
Now you can livestream to YouTube from your mobile device.
Apr 18, 2017, 8:05 AM
Google Home – Is It a Spy Device?
Apr 17, 2017, 7:30 AM
Apple added to self –driving test permit list
Apr 15, 2017, 6:21 AM
Project Scorpio – Coming on June 11
Apr 14, 2017, 6:20 AM
Looks Like Samsung Has Been Forgiven.
Apr 13, 2017, 6:50 AM
United Airlines - Blasted on China’s Social Network and the Stock Market
Apr 12, 2017, 6:50 AM
Amazon's Third-Party Sellers Hacked
Apr 11, 2017, 6:25 AM
Microsoft Surface Pro5 Details Revealed
Apr 9, 2017, 6:41 AM
Own An Android Phone? Then you could be hacked over Wi-FI
Apr 7, 2017, 6:47 AM
Apple confirms iOS 10.3 bug and its effect on iCloud Services
Apr 6, 2017, 6:30 AM
Apple Rolls Out New Version of Apple Music
Apr 5, 2017, 10:35 AM
Apple in the News
Apr 4, 2017, 9:03 AM
Apple iPhones Will Soon Feature Graphics Chips Designed BY Apple
Apr 3, 2017, 6:23 AM
AMD Ryzen Desktop Processors Performance
Apr 2, 2017, 6:30 AM
What makes a camera Lensless?
Apr 1, 2017, 7:45 AM
Google halts Android Wear 2.0 Update Due to Bug
Mar 31, 2017, 7:27 AM
Uber Technologies Inc Driverless Car hit by Human-driver
Mar 30, 2017, 8:00 AM
Android Creator and New Bezel-less Smartphone
Mar 29, 2017, 10:28 AM
More Blog Posts
Copyright 2017 DailyTech LLC. -
Terms, Conditions & Privacy Information