Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: marion (Hijacked) who wrote (3841)	5/3/1998 1:03:00 PM
From: Jan Crawley	Read Replies (2) \| Respond to of 164684

In fact, this whole issue became a "gold mine" for State Revenue Departments. You might not think they will go after individuals on this, but they do go after businesses on this. Since you are responsible for the tax, they can also levy penalties against you. This is very true. For the past 3 years or so some businesses here have been setting up "State/city sales tax payable" accounts to incur an expense whenever the vendors'(the Web vendors, out of the state vendors) invoices do not include applicable sales taxes. We then pay the taxes to the State/City revenue collection agency directly. The only materiality here is "the amount of tax revenue in relationship to the compliance costs. Now, apply the above to Amzn: 1. Sooner, but not later Amzn(and others) will have to collect and pay the applicable taxes. Revenue growth demands the compliance. 2. Currently, the exclusion of sales tax is a Revenue Advantage to Amzn, not a cost advantage, and has somewhat enabled Amzn to Lose a little less on it's bottom line. 3. The most important issue here, will Amzn's revenue growth be materially reduced if the State/local sales tax advantage is removed. We are talking an average of 7 to 8 percents sales tax rate here.

To: marion (Hijacked) who wrote (3841)	5/3/1998 2:59:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

If a company does not collect sales tax from you, you are still responsible for the tax. This is correct! You might not think they will go after individuals on this, but they do go after businesses on this. Correct again, they typically target the business since there are so many customers to locat. However, rare instances where a car or something quite expnsive is bought, the state will locate the buyer if the retailer cannot satisfy the tax. I doubt this will occur with books since a few dollars on each transaction will be a lot of work for the sate. They will go after AMZN. The idea of what constitutes a "physical presence" is also a very grey area. This and the reciprocal sales tax agreements make charging sales tax on mail order imperative now. If you order a computer from Dell, they will charge tax. Most of the mail order companies I order from do charge tax. Amazon has set themselves up for a potentially huge tax liability by not collecting the tax. Every company in which I use to order items that did not charge sales tax do now. I also doubt that Amazon informs their customers that they are responsible for paying the tax that they didn't collect. Of course not. They do not even tell their investors the interest rate of their junk bond<G> Glenn