How Amazon’s ambitious new push for same-day delivery will destroy local retail

[THEANGEL&THEGAMBLER]

Amazon same-day delivery: How the e-commerce giant will destroy local retail. - Slate Magazine

Amazon has long enjoyed an unbeatable price advantage over its physical rivals. When I buy a $1,000 laptop from Wal-Mart, the company is required to collect local sales tax from me, so I pay almost $1,100 at checkout. In most states, Amazon is exempt from that rule. According to a 1992 Supreme Court ruling, only firms with a physical presence in a state are required to collect taxes from residents. Technically, when I buy a $1,000 laptop from Amazon, I’m supposed to pay a $100 “use tax” when I file my annual return with my home state of California. But nobody does that. For most people, then, most items at Amazon are significantly cheaper than the same, identically priced items at other stores.

In response to pressure from local businesses, many states have passed laws that aim to force Amazon to collect sales taxes (the laws do so by broadening what it means for a company to have a physical presence in the state). Amazon hasn’t taken kindly to these efforts. It has filed numerous legal challenges, and fired all of its marketing affiliates in Colorado, North Carolina, Rhode Island, and California. It also launched a $5 million political campaign to get voters to turn back the California law. And when Texas’ comptroller presented Amazon with a $269 million sales tax bill last year, the company shut down its distribution center in Dallas.

But suddenly, Amazon has stopped fighting the sales-tax war. Last fall it dropped its repeal campaign in California and instead signed a deal with lawmakers to begin collecting sales taxes later this year. That was followed by several more tax deals—over the course of the next couple years, Amazon will begin collecting sales tax from residents of Nevada, New Jersey, Indiana, Tennessee, Virginia, and on July 1, it began collecting taxes from Texans. It also currently collects taxes from residents of Kansas, Kentucky, New York, North Dakota, and its home state of Washington. After all the tax deals go into effect, the company will be collecting taxes from the majority of its American customers.
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Why would Amazon give up its precious tax advantage? This week, as part of an excellent investigative series on the firm, the Financial Times’ Barney Jopson reports that Amazon’s tax capitulation is part of a major shift in the company’s operations. Amazon’s grand strategy has been to set up distribution centers in faraway, low-cost states and then ship stuff to people in more populous, high-cost states. When I order stuff from Amazon, for instance, it gets shipped to California from one of the company’s massive warehouses in Kentucky or Nevada.

But now Amazon has a new game. Now that it has agreed to collect sales taxes, the company can legally set up warehouses right inside some of the largest metropolitan areas in the nation. Why would it want to do that? Because Amazon’s new goal is to get stuff to you immediately—as soon as a few hours after you hit Buy.

 

[Rarely-Wrong Liggins]

Interesting.......but it'd be even better if the tax advantage was still there.

 

[Liquid]

This has been talked about internally since 2007, I remember it being brought up in meetings when I was actually paying attention

 

[GoldenGlove]

Damn, they're going to be running nikkas into the ground getting shyt out that fast.

 

[duncanthetall]

Amazon FTW

 

[The_Sheff]

Yeah, this is going to work right until someone runs the gasoline cost numbers.

The best they will be able to do is make two runs a day. If you order after those runs have begun then you wont get your shyt until the next day.

 

[Dooby]

I much much much rather have the tax free option than having same day the fukk man

 

[Hersh]

^^ amazon could do both and really control the game..

i know people that go out shopping.. and they just scan items and order at amazon in whatever store they at...

 

[Mr swag]

So I have to pay taxes AND wait hours for my product? Rather go to the store

 

[Sansprix]

So I have to pay taxes AND wait hours for my product? Rather go to the store

Yeah, I agree. It sounds nice at first....but they will most likely be charging a delivery fee to have it there that fast. So that means we'd most likely be paying more with taxes, delivery fees, and the time to have it delievered than the money we'd spend in gas to just go to the store and pick it up and have it instantly.

 

[R=G]

fukking Republicans

 

[Swiggy]

So, I can order some blurays, and 2 larges w/ pepperoni and bacon, then wait to see what gets here first?

 

[Golayitdown]

fukking Republicans

 

[Golayitdown]

So, I can order some blurays, and 2 larges w/ pepperoni and bacon, then wait to see what gets here first?

Even when adding the taxes and shyt Amazon has the advantage. They can still slightly undercut the B&M stores on identical items AND they have a much larger selection than B&M stores can ever wish to have.

 

[Waka FICO Flamez]

So, I can order some blurays, and 2 larges w/ pepperoni and bacon, then wait to see what gets here first?

2 larges ???..how fat are you