Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



A More Level Playing Field for Retail in 2013?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now (NASDAQ: AMZN  ) might have a tax problem on its hands. According to new data from ChannelAdvisors, the e-tailer's sales took a dip in states where the company started charging sales tax this quarter.

California, Texas, and Pennsylvania recently joined just five other states on Amazon's taxing list. That effectively ends at least one price advantage that the company had over local stores there. And it opens the door -- just a crack -- for Amazon's competition.

ChannelAdvisor's analysis focused on California, where Amazon started collecting sales taxes in September. State taxes can add a hefty 8% to a customer's bill there.

No surprise: Shoppers were motivated by the price changes. As customers braced for the Sept. 15 price hike, ChannelAdvisor tracked a sales spike -- as high as 70% above other states -- in the week before the change. And afterward, Amazon's sales fell as much as 10% below other states' results heading into the holiday crush.

Those pricing changes also might have set the stage for better results at other retailers. Best Buy (NYSE: BBY  ) told Reuters last week that it saw about a 5% bounce in online orders from California, Texas, and Pennsylvania after Amazon's tax collecting ramped up. The struggling retailer just reported flat holiday sales, which were kept afloat by a solid 10% rise in e-commerce. Target (NYSE: TGT  ) booked its own disappointing sales growth of 0% in December. Still, the company was happy enough with its holiday price-matching policy against Amazon that it decided to extend it year-round.

But Amazon is a huge global retailer, expected to book $22 billion in revenue for the December quarter, after turning in $14 billion last quarter. The loss of a slight price advantage in a few states, even big ones like California, won't have much of an impact on overall earnings or revenue. Still, eye-popping revenue figures like those have drawn a lot of attention from state governments. So Amazon can't expect its list of just eight tax-charging states to stay that small for long.

Amazon has been a longtime pick of Motley Fool superinvestor David Gardner, and has soared more than 1,665% since he first recommended it in September 2002. David specializes in identifying game-changing companies like this long before others are keen to their disruptive potential and helping like-minded investors profit while Wall Street catches up. Learn more about how he picks his winners with a free online tour of his flagship service: Supernova. Inside you’ll discover the science behind his market-trouncing returns. Just click here now for instant access.

Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 26, 2013, at 2:44 PM, crca99 wrote:

    Glad to see a level playing field. About time AMZN got taxed.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2204181, ~/Articles/ArticleHandler.aspx, 9/26/2016 11:51:31 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,115.54 -145.91 -0.80%
S&P 500 2,150.43 -14.26 -0.66%
NASD 5,263.95 -41.79 -0.79%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/26/2016 11:36 AM
AMZN $801.82 Down -3.93 -0.49% CAPS Rating: ****
BBY $37.54 Down -0.45 -1.18%
Best Buy CAPS Rating: *
TGT $67.60 Down -1.17 -1.70%
Target CAPS Rating: ***