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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 day the sales tax went into law, Amazon essentially fired every one of its associates in the state.
Amazon essentially fired every one of its associates in the state... Fewer affiliates means fewer doorways into the Amazon site and thus fewer sales.