Amazon to Begin Collecting Sales Taxes

Online retailer turns to regional DCs to try to maintain competitive advantage.

The collective prayers of thousands of traditional retailers and distributorships are being answered as Amazon is forced to begin collecting sales taxes in several states including California, Texas and Pennsylvania.

This chart generated by the New York Times shows states where Amazon must collect sales taxes on sales presently and out to 2016.

At the moment, it is little more than dirt and gravel. But a sunbaked field at the edge of this farming town will play a significant role in one of the most ambitious retailing ventures of the era: the relentless quest by the online mall to become all things to all shoppers.

A million-square-foot warehouse stocking razor blades and books, diapers and dog food will soon rise on this spot, less than a mile from the highway that will deliver these and just about every other product imaginable to customers 85 miles away in San Francisco. It is hundreds of miles closer to those consumers than Amazon’s existing centers in Nevada and Arizona.

A similar distribution center is being built on the outskirts of Los Angeles. Others are under way in Indiana, New Jersey, South Carolina, Tennessee and Virginia.

This multibillion-dollar building frenzy comes as Amazon is about to lose perhaps its biggest competitive edge — that the vast majority of its customers do not pay sales tax.

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Source: The New York Times