This has to be affecting other businesses that are in those states. What are the individuals doing with their purchases? Are they shopping elsewhere, offline, or through some other means to acquire their purchases? Or, are they actually reducing their purchases by almost a quarter?
Amazon.com Inc. (AMZN) is taking a hit in states that are collecting an online sales tax.
In one of the first efforts to quantify the impact of states accruing more tax revenue from Web purchases, researchers at Ohio State University published a paper this month that found sales dropped for Amazon when the online charge was introduced. In states that have the tax, households reduced their spending on Amazon by about 10 percent compared to those in states that donít have the levy. For online purchases of more than $300, sales fell by 24 percent, according to the report titled ďThe Amazon Tax.Ē Report: Online Sales Tax In US Stated Is Reducing Amazon Sales 24 pct [bloomberg.com]
"The biggest sales uptick -- 61 percent for big-ticket items -- went to merchants that use Amazon Marketplace. These outfits pay Amazon a fee to offer products through the Amazon website, yet donít collect taxes. The products are typically available alongside Amazonís own listings."
So they still shopped at Amazon, they just picked an available alternative that didn't charge sales tax - not really a "sales drop for Amazon" in most people's minds.
Amazon favors the Mainstreet Fairness Act, that would impose a nationwide, simplified sales tax everywhere.
I shop at Amazon if I can get free shipping, which kind of balances out the sales tax. But often I will prowl Amazon for the reviews and whatnot but then buy the item elsewhere online, where they don't charge sales tax. Even though Amazon bought abebooks, for instance, the latter does not charge sales tax (and often the same book is cheaper with them than with Amazon). So I buy most books from them instead of Amazon.