Friday, July 13, 2012

With sales-tax break vanishing, plans new tactic: same-day delivery has long leveraged the 1992 Supreme Court decision in the case of Quill vs. North Dakota, which said that a retailer would not be required to collect sales tax in a state unless it had a "physical presence" in that state. With that, and its practice of  setting up distribution centers in faraway, low-cost states, it's always had a sales tax advantage over brick-and-mortar retailers like Target.

Why then, has the company recently begun capitulating to states that have changed their laws in an attempt to collect sales tax from the Internet giant?

For example, last year began a referendum attempt using California's Proposition system in an attempt to repeal a law which said that if had any California "Associates" (meaning websites advertising its products), that constituted a "physical presence." It later shelved that plan, and instead inked a deal with lawmakers to begin collecting sales taxes later this year. has since made several more sales tax deals, and over the next two years or so, will begin collecting sales tax from residents of Nevada, New Jersey, Indiana, Tennessee, Virginia. On July 1, it began collecting sales tax from Texas residents, and had already been collecting sales tax from residents of Kansas, Kentucky, New York, North Dakota, and its home state of Washington.

Once all is said and done, will be collecting sales tax from the majority of its American customers.

That would seem to shut down one of's greatest perks, as no sales tax was a significant saving for those living in high sales tax states such as California. In addition, though, has lower prices for many products, even without taking that former sales tax advantage into account.

For example, a Samsung UN55ES8000 55-Inch 1080p 240 Hz 3D Slim LED HDTV (Silver) has a retail price of $3,749.00, but is priced at at $2,497.99. In addition, it qualifies for the company's TV Low Price Guarantee, free shipping with Amazon Prime, and Free 30 Day TV Returns.

Shopping at is also certainly convenient, as you can look through a large variety of items in a particular category, without having to go to a store (using up more time, of course, than might be spent on the website, and also using your own gas). With that, except for some things the site doesn't carry, and perishable groceries, we buy most items at

And it's that convenience that might be relying on to replace its sales tax advantage. Financial Times (free registration required) says's new tactic will be same-day delivery. They will be able to accomplish that because, by caving in on sales tax, can now put distribution centers in all those states.

Already, we've seen things that - using Amazon Prime - we should have received in two days delivered in one day, instead. However, we see them delivered not by UPS, but by a local delivery service, in one day. It's not much of a stretch to imagine changing that to same-day service.

Right now, with Amazon Prime, two-day service is free (for most items). One-day service is usually $3.99 per item. It's easy to see that soon, one-day service might be the norm, with $3.99 per item being the "upgrade."

Let's be honest: as we noted earlier, the convenience and savings in time, gasoline, and means our household shops at approximately 80 percent of the time. We know others doing the same thing. With same-day delivery, could seriously hurt local retailers - not that they haven't been doing so already.

Naturally, there are some that want to see and touch something before buying it. However, our society has become one where instant gratification is a strong driver. If can meet that standard, why would you - or at least, most - shop anywhere else?

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