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Sales Tax Takes a Bite Out of Amazon's Bottom Line

 
Posted April 22nd, 2014 @ 2:00pm by KFBK News - Zack Stein

A new study shows sales tax collections have taken a bite out of Amazon's bottom line.

An Ohio State University study found that Amazon took a sales hit in states where they're required to collect sales tax.

"In California we see a drop of about almost 15 percent in Amazon sales," Professor Itzhak Ben-David said. 

Ben-David says shoppers are pricing items on Amazon, but then find another retailer to complete the transaction.

"What's supposed to be Amazon sales actually go to a brick-and-mortar retailer and also to online retailers, so this could be somebody like a Walmart.com, for example," Ben-David said. 

The study found that when an item costs $300 or more, Amazon sales drop by 24 percent when they have to collect sales tax.

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