Amazon Law Showdown or Amazon Law Negotiation?
For those of us that follow sales and use tax, I find the Amazon response to state "Amazon Laws" to be one of the most fascinating business stories in ages.
If you've followed our blog posts, you've also been tracking the trail of Amazon Laws, local retail pressure for internet sales tax and Amazon's strategic response. As local retailers look to level the sales tax playing field, Amazon has turned the new Amazon Laws to their advantage by using them as an opportunity to develop new distribution centers. These DC's could enable Amazon to further gain advantage over local retailers by providing same day delivery of goods. Also, with the promise of building new DC's, Amazon has received a reprieve from collecting sales tax and other consideration.
We're seeing this play out in Georgia right now. Georgia's new Amazon Law went into effect at the first of the year, but Amazon has failed to comply. This has left Georgia to contemplate pursuing a risky and expensive legal action against Amazon.
Amazon has let Georgia stew long enough. Now Amazon is ready to deal. If Georgia will delay implementation of the new law, Amazon will keep jobs in Georgia by building a new distribution center. To help state lawmakers sell the deal to constituents, Amazon positions this as a jobs program.
Amazon knows that their tax advantage will come to an end and they are making the most of it. My guess is that it won't be long before you can order something on Amazon in the morning and have it arrive before you get home from work. That's a tough service to compete against.
I wouldn't be surprised if the term "Amazon Law" develops a new meaning where "Amazon Law" is a law that is designed by an interest group to recapture competitive advantage only to backfire and develop into a strategic problem.
Read more about Georgia and Amazon here: Georgia, Amazon Face Off Over Sales Tax