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Best Buy Online Sales Rise Due to Amazon Tax

By - Source: Reuters | B 38 comments

Best Buy and other retailers may profit at the expense of Amazon.

Online shoppers across California and Pennsylvania all despaired at the news that Amazon was to be levying a sales tax down on their purchases in September 2012. No doubt many of them immediately sought out cheaper, tax-free alternatives to the popular online shopping service.

In fact, Best Buy may be one of the retailers enjoying the luxury of increased business at the expense of Amazon. "In California, Texas and Pennsylvania where Amazon.com recently started collecting tax, it is very early, but Best Buy has seen a 4 to 6 percent increase in online sales observed in aggregate versus the rest of the chain," stated Best Buy spokeswoman Amy von Walter to Reuters, "While some people may still prefer to shop online, the sales tax parity has shown that people will shift their buying habits."

Previously, Amazon had been accused of having an unfair advantage over physical retailers, because it didn't require customers to pay sales tax. That's slowly been changing across the United States, as state legislatures have passed laws requiring the online retailer to levy sales taxes in hopes of helping the ailing economy.

Best Buy's better fortunes have caused its shares to rise, which closed 5 percent higher on Thursday. However, according to Kantar Retail Vice President of Digital Retail Research Anne Zybowski, this trend is something that will only be confined to more expensive areas of purchase, such as consumer electronics. "Particularly in consumer electronics, any narrowing of Amazon's price advantage at the margin is important because Best Buy brings service and other shopper benefits to the category," she said.

"I don't think retailers should get too excited.

"Best Buy results are isolated to consumer electronics. Once you start getting over the $100 purchase price level, the tax matters.

"If this had happened to Amazon when they were just a bookseller years ago, they may not be as big as they are now."

Still, the increases that other companies are going to experience are probably going to be marginal, as Amazon's garnered plenty of loyal customers over the years with its good customer service, low prices, and fast shipping. Its Amazon Prime deal for $79 a year with video streaming and free two day shipping doesn't hurt either. 

 

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  • 6 Hide
    Anonymous , January 12, 2013 2:13 AM
    The Egg baby, free shipping and NO taxes.
  • 2 Hide
    abbadon_34 , January 12, 2013 2:20 AM
    Amazon should have left CA than submit to the extortion and set a bad precedence for everyone else
  • 7 Hide
    SteelCity1981 , January 12, 2013 2:21 AM
    typical best buy crying cause amazon wasn't adding in sales tax to their products whats next best buy going to cry because they aren't paying stocking fee either? It's best buys fault that they are on the the brink of going bankrupt with over their top prices on many products, i was in there last week and they were still trying to sell an nvidia GT 440 for 100 bucks. lol and they wonder why people flock to online retail stores.
  • 6 Hide
    capt_taco , January 12, 2013 2:37 AM
    Doesn't it say in the constitution that only Congress can regulate interstate commerce? So where does California get off thinking they're allowed to do that now? Gimme gimme gimme, that's all that's on their mind.
  • 1 Hide
    ipwn3r456 , January 12, 2013 2:38 AM
    Stupid Amazon tax... Why do you have to exist...
  • 6 Hide
    gilgamex101 , January 12, 2013 2:38 AM
    Best Buy is a robbery, a blatant robbery, I saw a stick of PNY 512mb DDR2! DDR2!! for $25 not too long ago! Amazon in general is one of the most comprehensive places to shop, it is even more organized than ebay with seperate affiliate online stores. Whatever self-proclaimed gains Best Buy is having, I don't buy it (semi-pun?)
  • 8 Hide
    cmcghee358 , January 12, 2013 2:39 AM
    soldier2013The Egg baby, free shipping and NO taxes.


    No taxes for you? Yes

    No taxes for residents of California? Not so much. Newegg charges sales tax for customers in California(and possibly NJ/TN, not 100% on these 2)
  • 5 Hide
    jupiter optimus maximus , January 12, 2013 2:42 AM
    So that explains why California had it first revenue surplus in 14 years. (sarcastic)
  • 6 Hide
    hitman400 , January 12, 2013 2:54 AM
    Guys, (I'm pretty sure) but they HAVE to charge tax for people who buy their products in the same state that they are located in as well as their warehouse. I forget what kind of tax this is, but..ya
  • -2 Hide
    alidan , January 12, 2013 2:55 AM
    Quote:
    "If this had happened to Amazon when they were just a bookseller years ago, they may not be as big as they are now."


    book at retail, 30-50$
    book on amazon, 8-20$ cheaper, and thats new prices, you willing to go used and its up to 95% cheaper.

    thats amazons strong suit, being so cheap that even when sales tax is applied they are the cheapest.

    at the same time, i think the way sales tax is applied is wrong.

    the items cost should have sales tax included, not being slapped in the face later on at checkout with what, 1-11.5% more cost added onto whatever it is.

    i dont even believe we should have a sales tax considering that some states dont.
  • 2 Hide
    unksol , January 12, 2013 3:07 AM
    alidanat the same time, i think the way sales tax is applied is wrong. the items cost should have sales tax included, not being slapped in the face later on at checkout with what, 1-11.5% more cost added onto whatever it is. i dont even believe we should have a sales tax considering that some states dont.


    Sales taxes are for YOUR state's spending on YOUR state's programs.

    Hate sales tax? Start a campaign to have them raise your state income and property taxes instead. The money is going to come from somewhere.

    Or get them to cut spending on worthless programs (cough *California* cough). Its your state's budget, your problem. You don't like something then change it.
  • 3 Hide
    unksol , January 12, 2013 3:10 AM
    Quote:
    Doesn't it say in the constitution that only Congress can regulate interstate commerce? So where does California get off thinking they're allowed to do that now? Gimme gimme gimme, that's all that's on their mind.


    Amazon has offices and warehouses in California. Its not interstate commerce. If you don't wanna pay for the dumb stuff California spends money on, some of which I am sure is on you. Then don't live there or fix your state
  • 7 Hide
    amuffin , January 12, 2013 3:51 AM
    Time to move to Oregon.
  • 4 Hide
    JOSHSKORN , January 12, 2013 4:18 AM
    When was the last time Best Buy was the best buy? Think about that one for a while.

    Go into Best Buy or Frys, look at device, use Amazon Barcode scanner on phone, purchase it from Amazon, leave store empty handed, having purchased a better deal.
  • 4 Hide
    alidan , January 12, 2013 4:30 AM
    unksolSales taxes are for YOUR state's spending on YOUR state's programs.Hate sales tax? Start a campaign to have them raise your state income and property taxes instead. The money is going to come from somewhere. Or get them to cut spending on worthless programs (cough *California* cough). Its your state's budget, your problem. You don't like something then change it.


    honestly i want a flat tax across the board with no deductions of any kind. i hate the current tax code that's in place where no one can really speak out against it in fear that they didnt pay their due. the government really wants to shut you up, that's how they can do it because i guarantee everyone in this country didnt pay the right amount somewhere in the 1000+ pages of tax code laws.

    we should only be taxed once for the purpose of raising funds, anything more than that is corruption (think vice taxes, or deductions you get for being married or having kids)
  • 4 Hide
    unksol , January 12, 2013 4:49 AM
    Quote:
    honestly i want a flat tax across the board with no deductions of any kind. i hate the current tax code that's in place where no one can really speak out against it in fear that they didnt pay their due. the government really wants to shut you up, that's how they can do it because i guarantee everyone in this country didnt pay the right amount somewhere in the 1000+ pages of tax code laws.

    we should only be taxed once for the purpose of raising funds, anything more than that is corruption (think vice taxes, or deductions you get for being married or having kids)


    That's entirely my point. Petition your state to have a flat tax if that's what you want. Elect people who support that. Do something about it.

    Your never going to get rid of state taxes though, they will always be separate from federal by the design of our country, and you can't complain that someone in another state gets taxed less or more on a state level, or taxed with a different method. The people of the state have the right to choose how their state spends state money and how that money is collected. And sales taxes are ONLY state taxes.
  • 0 Hide
    bryonhowley , January 12, 2013 5:10 AM
    Weather Newegg has to charge tax for California residents or not does not matter to me where I live Newegg does not charge tax and that is all that counts. For my new rig that will be here tomorrow that meant only $22.00 shipping on $1500 purchase. Had Newegg had to charge tax I would have had to leave something off my list as the price would have been more than the $1500 I had to spend.
  • 8 Hide
    SteelCity1981 , January 12, 2013 5:11 AM
    hakestermanWhat all you Boneheads gonna do when Bestbuy goes under because you low lifes game playing. As soon as Amazon puts out BB and all the other Electronic Stores their prices will sky rocket as high if not higher than Bestbuy and you won't have any other options. Furthermore if BB goes under, you won't have a store to go looking at products, then what %^&%^ Holes. Best Buy is a good store, if you don't like em stay the %&^& out of their store Bitches.............


    Are you getting paid by best buy?

    So amazon will just take over the internet retail world is that what you are saying? lol Amazon is one of many upon many sucessful online retail stores on the interent. So no amazon is some giant threat to online retails stores liek you want to make it out to be or else places like newegg would have fallen years ago and last time i check newegg is highly sucessful.

    oh yes because best buy is the only place that sells electronics and or games at their store. lol Lets see there is Fry's, HH Greg, Stamples, Office Depot, Office Max, Walmart, Game Stop, Target etc....

    Best Buy is a good store? is that the only store you ever been to in your life that sells eltronics? lol Best Buy is a rip off i can go to Fry's for example and buy the same electronic device cheaper. You really are clueless aren't you?
  • 6 Hide
    susyque747 , January 12, 2013 11:09 AM
    ipwn3r456Stupid Amazon tax... Why do you have to exist...

    It's called a fat bloated greedy government that has become a leech on freedom everywhere.
  • 3 Hide
    warmon6 , January 12, 2013 11:23 AM
    SteelCity1981Are you getting paid by best buy? So amazon will just take over the internet retail world is that what you are saying? lol Amazon is one of many upon many sucessful online retail stores on the interent. So no amazon is some giant threat to online retails stores liek you want to make it out to be or else places like newegg would have fallen years ago and last time i check newegg is highly sucessful.oh yes because best buy is the only place that sells electronics and or games at their store. lol Lets see there is Fry's, HH Greg, Stamples, Office Depot, Office Max, Walmart, Game Stop, Target etc....Best Buy is a good store? is that the only store you ever been to in your life that sells eltronics? lol Best Buy is a rip off i can go to Fry's for example and buy the same electronic device cheaper. You really are clueless aren't you?


    +1

    If i was force to any brick store, it would be Microcenter. Not best buy.

    If you have one near you, you enjoy the benefits of getting an core i3/5/7 alot cheaper than anywhere else, and there prices for the other stuff are comparable to others.

    Bestbuy, most stuff i could get there (electronic wise) is way over priced and can get it cheaper else where.
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