Thursday, August 18, 2011

Amazon.com claims one out of five global Internet retail visitors in June 2011

If you wonder why states are frothing at the mouth, trying to get Amazon.com to collect sales tax on sales, it's precisely because of statistics like this. A new comScore report released on Wednesday indicates that Amazon.com was the most visited retail site globally in June.

ESET Smart Security - Save 25%Amazon.com had more than 282 million visitors in June, according to the comScore report. That amounted to more than 1 in 5 (20.4 percent) of the worldwide Internet population. eBay was second, visited by 223.5 million or 16.2 percent of the global Internet population, followed by China's Alibaba.com (156.8 million or 11.3 percent), Apple.com Worldwide Sites (134 million or 9.7 percent) and Japan’s Rakuten Inc. (57.8 million or 4.2 percent) to round out the top five.

States like California have been trying to get Amazon.com to collect sales tax from its customers. At issue is a long-standing Supreme Court ruling that said that if a retailer did not have a "physical presence" in a state it was not required to collect sales tax from customers from that state.

The ruling, Quill vs. North Dakota in 1992, was then aimed at catalog sales, and designed to protect them from the thousands of different sales tax rates across the country. Certainly a mom-and-pop couldn't process all that. On the other hand, a company as large as Amazon.com could.

Free Shipping on orders of $25 or more at BarnesandNoble.com!To be clear, consumers themselves are supposed to pay this sales tax on their state income tax returns. That said, we are sure you can figure out for yourself how many of them actually do.

To get around the fact that in a majority of states, Amazon.com has no physical presence as it used to be defined (meaning, a brick-and-mortar store), states like California have redefined physical presence to also mean if Amazon.com or any site has affiliates (sites advertising for them) that are based in that same state.

In response, Amazon.com and other retailers have dumped their affiliates in any state that has created such a law.

Interestingly, one of the largest brick-and-mortar retailers that has cried foul against Amazon.com, WalMart, was No. 6 on the list of top Internet retailers.

This new report just reconfirms that Amazon.com has become the world's largest online retailer. It strengthens the argument that Amazon.com and other large retailers should be collecting sales tax.

That said, not having to collect sales tax gives Amazon.com a near 10 percent discount in high sales tax states like California. Amazon.com is taking to California's proposition system to try to get California's recently passed law repealed. It's expect that eventually this may end up in the Supreme Court.



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