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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: H James Morris who wrote (130433)	8/22/2001 3:20:13 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

Glenn, How do you think Circuit City/Amazon will handle the sales tax issue? You really are a mind reader. I was thinking this morning that I was going to ask the same question when I had time to look at SI. I have not seen the actualy contract as I am certain most here have not. Regardless, I believe many of the states are going to view this as a "nexus" and therefore, we rquire the collection of sales on picked up items. This though can go further into every item Amazon sells unles they incorporate their books, CDs, etc. as a seperate firm. The states have been dying to tax on-line sales and the states can afford a protracted litigation on this issue far longer than Amazon or Circuit City. Not only that, I believe the states can collect the tax until the outcome of litigation is complete. Quill had one "heck" of time with 16 states in I believe 1994. Quill lost the lower court's decisions but won on the nexus issue in the US Supreme Court. The cost of this litigation was enough to keep Quill non profitable for years. This was at a time prior to the office supply super stores such as Staples, Officemax and Office Depot. The competition for Quill was the local Mom and Pop office supply store. Quill was fianancially weakened due to the lawsuit and then was facting extrememly stif competition from office supply supr stores. They were eventaully purchased by I believe Staples Candidly, the only firm that I have seen with adequate financial resources to defend against most state governments is Microsoft. That was due to their small amount of available cash<G> This does not even address the Federaal Governement charges. Anyhow, the state can file agains Amazon and Circuit City seperately and force Amazon and Circuit City to defend in each state. The answer is for them to charge sales tax but that amount on electronics likely will be equal to the shipping fees. I have to say I have never enjoyed watching a firm operate through minds as much as Amazon. It is great entertainment that is currently free as an observer. I am not sure how many firms that have never turned a profit have so much litigation going on as Amazon has presently. This could be a record of sorts.