Where Is The Amazon

California May Never Collect the Amazon Tax

The tax would bring in an estimated $200 million a year. The bill would allow California to collect taxes from any online retailer that has nexus with an affiliate site in California. Amazon.com and Overstock.com have been dropping their affiliates in several other states in a bid to fight against such laws.

The bill also includes two other bills that were also passed by the California State Legislature that would require online retailers that have corporate subsidiaries and distribution centers in a state to collect sales tax from customers, along with another bill that clarifies when other kinds of physical presence require a sales tax to be collected. The three bills were combined into one and sent to Brown's desk earlier this month.

Online retailers must start collecting sales taxes from California customers

Beginning Friday, Amazon.com Inc. and other large out-of-state retailers will be required to collect sales taxes on purchases that their California customers make on the Internet.

The new tax collection requirement — part of budget-related legislation that was signed into law by Gov. Jerry Brown Wednesday — is expected to raise an estimated $317 million a year in new state and local government revenue.

…

Brown's signature on the budget bills is aimed at closing a loophole that freed online retailers, such as Seattle-based Amazon, from collecting sales taxes and sending them to the state when they had no brick-and-mortar stores, warehouses or offices in California.

Not collecting sales taxes gave Internet retailers a competitive price advantage over California's small businesses such as independent booksellers and big-box retailers with a presence in the state, including Barnes & Noble Inc., Wal-Mart Stores Inc., Best Buy Co. and Target Corp.

"You can't give one segment of retail a 10% discount every day. It's just not fair," said Bill Dombrowski, president of the California Retailers Assn., a major player in a coalition of large and small stores supporting the legislation.

California's new requirement will generate badly needed state revenue and send a signal to Congress that "we want to see a national solution" to the issue of taxing Internet sales, Dombrowski said.

The LAT assumes that Amazon subsidiaries in California make it vulnerable to the tax, but those subsidiaries can be moved or sold. Who thinks Amazon is going to keep IMDB if it forces a 10% price increase for 12% of its US customers?

rc3.org - Where is the Amazon Prime of online journalism?

Where is the Amazon Prime of online journalism?

In Commentary on 21 March 2011 tagged The Media with 11 comments

A lot of people have said that they wished that the New York Times’ new pricing system was more about offering more value for people who do pay rather than putting barriers in the way of people who don’t pay. Those remarks immediately made me think of Amazon Prime.

Amazon Prime subscribers pay $80 a year in exchange for “free” two day shipping on every Prime-eligible item they purchase from Amazon.com. It is, essentially, a loyalty program that you have to pay to join. I’m certain it exerts a powerful influence on the buying habits of subscribers. If a subscriber buys something from a site other than Amazon.com, they’re likely to pay more for shipping, receive the item later, or both. Plus, they’ve already got the sunk cost of the Prime membership on their mind. When they go to other sites, they probably think, “Shouldn’t I look for this on Amazon.com first to see if I can use my Prime membership?”

I always wonder how many Amazon Prime subscribers buy enough stuff over the course of the year to make the $80 they spend on their Prime membership a good deal. My guess is what they’re really buying is the ability to make impulse purchases without worrying about whether they should have waited to group items for free shipping, which in turn leads them to spend even more money with Amazon.com. Amazon.com further benefits from Prime because it encourages third party sellers who use the site to turn their fulfillment operation over to them as well so that their merchandise can be eligible for Prime shipping.

One of the core values at O’Reilly is to create more value than you capture. The fact that Prime benefits Amazon.com in many ways has nothing to do with why people pay for it — they pay for it because it delivers value to them. What can the New York Times offer that creates more value than it captures?

Clearly the New York Times would argue that their articles and blog posts deliver value well beyond their subscription fee. Unfortunately, they have lowered the perceived value of their product by providing free access to their articles for years, and more importantly, close substitutes for what the New York Times offers remain freely available.

Anyway, my plan was to make this a really awesome post with a suggestion for the New York Times that would save the paper and revolutionize online journalism. Unfortunately, great ideas elude me. I even sat and thought about what service I would gladly pay for from the New York Times, and I couldn’t come up with anything. Maybe I’m just happy I don’t work for a news site.

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