Saturday, September 24, 2011
Can Anyone Explain To Me What Happened Here?
Did Amazon lose too much money by cutting off its California affiliates, is that why they're now cozying up to California? I can't come up with any other explanation, but in all the articles I've read about this I can't get a clear explanation of the motivation behind their about-face.
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From Amazon's point of view . . .California is likely one of their greatest sources of vendors, and this compromise now allows them to use them to sell to the other 49 states tax free. Within CA, they will have to charge sales tax, but since those sales don't exist currently anyway, it's at worst a push, and likely a gain. They also get the tax holiday, allowing them to sell tax free to CA residents, who likely will make use of it. They also gain the appearance of working with the government, making it less likely that a National bill will go through.
From the consumer's standpoint . . .we're less well off than we were before the bill, but better off than before the compromise. We have the grace period, and, we will have more vendors to choose from. We will always have the choice of buying from CA and paying the tax, or selecting an out of state vendor.
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