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

To: Sam Citron who wrote (23884)	10/30/1998 1:16:00 PM
From: Gary Walker	Respond to of 164684

As commerce moves to the internet, I think states will move to tax the sales. Anybody know the real story?

To: Sam Citron who wrote (23884)	10/30/1998 1:17:00 PM
From: IceShark	Read Replies (2) \| Respond to of 164684

Query: Why doesn't Wal-Mart operate its online venture as a separate subsidiary under another name? Wouldn't that enable them to sell online without charging customers a sales tax (because the company would have no "substantial presence", i.e., stores, in the state of purchase)? SC, I seriously doubt it would ever be worth it. Plus the sales tax jig will be up soon. To avoid the States from piercing the corporate veil, vis-a-vis sales tax, Wal-Mart would have to sever the operations, purchasing power, management and support functions to such a degree that it would cost them far more in parallel systems than the sales tax avoided. And IMO, the days of tax free mail order are fast drawing to a close. The siamese twin of State "sales tax" is the "use tax" due by the consumer. Most people don't realize it, but they are tax evaders by not reporting and paying "use tax" to their home States for mail order purchases on which the seller didn't collect and forward "sales tax". The States have been nailing use tax avoiders for years on autos and boats, due to the fact they need registrations and are large ticket items. Mail order PCs (good example is GTW), was another successful target. The States basically told GTW to collect sales tax or they would subpoena GTW's sales records and go after the end customers for use tax. GTW agreed since the prospect of their customers being tax audit targets didn't look like a good way to build customer relations. -g- We now are looking at increasing sophistication of information systems and ease of data collection and manipulation, as in AMZN's systems. This will very quickly make it feasible, from a cost/collection value standpoint for the States to strong arm many mail order firms. The only things that have prevented it to date is the Supremes ruling the States can't enforce the "sales tax" collections on out of state firms, and the cost to the States of going after mail order consumers for "use tax" on low ticket items wasn't worth it. But cut down the transaction cost through technology and it is a go. Regards, Ice