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Technology Stocks : Dell Technologies Inc.
DELL 138.58-1.5%3:59 PM EST
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To: Meathead who wrote (162111)10/13/2000 11:39:18 PM
From: Bill Jackson  Read Replies (3) of 176387
 
Meathead. Dell still has the sales tax advantage that GTW gave up to most states. Freight offsets a part of that, but it continues to help dell to some degree. That approx 5% is alomst 50% of the gross margin in many cases.
In the long run dell and GTW are converging in costs with GTW a little higher due to volumes on Intel based systems and with GTW able to trounce Dell with Athlon based systems in price as well as performance. That gives GTW some edge that offsets the sales tax.
If the States get their act together and trade enough data to allow each local state to collect the sales tax from buyers that are out of state that will hinder dell
(What I mean by this is the same way new jersey and New york audit sales taxes. NY has the right to give to NJ the names and addresses of all NJ buyers of expensive good. NJ then invoices the people for the sales taxes. And NY gets data from NJ. Many states do this now to get around the sales tax situation caused by out of state sales.
It only pays for larger amounts. However some states are now adding all the sales to John doe together and making an invoice for that. In many cases a number of $29.95 purchases would not be worth chasing one at a time. If however they add up that persons purchases from 50 out of states sellers to $1500, then the sales taxes are worth chasing.
More and more states are getting into this and as soon as they get good at it the out of state sales tax advantage will be greatly abated.)

Bill
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