Amazon Pushes to Maintain Competitive Edge while Collecting Sales Tax

By David Tobia
September 14, 2012

Local retailers in California anticipate an exciting development Saturday, as Amazon customers in the state will have to begin paying sales tax on purchases.
Customers in Nevada, New Jersey, Tennessee, Virginia, Indiana and South Carolina will all pay taxes on Amazon purchases by 2016.
To counter the loss of this competitive advantage, Amazon plans to build million-square-foot warehouses in these states to minimize shipping times and convince customers to continue to shop online rather than locally.
Customers in Washington, New York, Kentucky, North Dakota, Kansas, Texas and Pennsylvania already pay sales tax on Amazon purchases.
The warehouses will allow Amazon to cut shipping times to one day, but Amazon still hopes to reach same-day shipping at some point. Amazon faces the challenge of improving shipping times while also staying profitable.
Currently, Amazon makes less than a penny for each dollar in sales, so it will need to make its fast delivery efficient if it hopes to make any profits.

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