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The argument I've always heard against Amazon acquiring Netflix is that Netflix has distribution centers in something like 45 states, whereas Amazon only has th
by catone 18y ago
The argument I've always heard against Amazon acquiring Netflix is that Netflix has distribution centers in something like 45 states, whereas Amazon only has them in a handful. So that'd be 45 states in which Amazon would then have to charge sales tax.
If Netflix were a solely streaming operation, it'd make sense for Amazon, or if tax on ecommerce was already charged in most states regardless of physical presence it would make sense. Not sure it does otherwise, though.
- antiismist 18y agoAmazon seems to charge sales tax based on where the goods are shipped to, not where they are shipped from: "Items sold by Amazon.com LLC, or its subsidiaries, and shipped to destinations in the states of Kansas, Kentucky, New York, North Dakota, or Washington are subject to tax." http://www.amazon.com/gp/help/customer/display.html?nodeId=468512 http://www.amazon.com/gp/help/customer/display.html?nodeId=4...
- catone 18y agoI think those are the states in which they have a physical presence. I know their headquarters are in Washington, for example, and that they have a big distribution center in Kentucky. New York, though, may just have laws taxing ecommerce (I'm not certain).
- antiismist 18y agoNope, Amazon has distribution centers in 8 states, but they don't all get sales taxed: http://en.wikipedia.org/wiki/Amazon.com#Fulfillment_and_warehousing http://en.wikipedia.org/wiki/Amazon.com#Fulfillment_and_ware...
- catone 18y agoI guess it would depend on the sales tax laws in each state. Some states require sales tax on ecommerce if there is a physical presence, some do not. Some require tax regardless. The argument I have always heard in relation to Netflix is that if Amazon were to acquire Netflix it would mean charging sale tax to a much greater number of customers. Netflix has many more established physical presences across the US: http://www.listology.com/netflix_tracker_reports.cfm?report=centers http://www.listology.com/netflix_tracker_reports.cfm?report=...
- timae 18y agoHis point was that if Amazon has a physical presence in the state it's shipping to, it must charge sales tax in that state.
- catone 18y agoJust did a search and found something on what I was talking about: http://blogs.zdnet.com/BTL/?p=5302 http://blogs.zdnet.com/BTL/?p=5302 Had my facts a little mixed up (it's 43 distribution centers, not in 45 states). Anyway, take it for what you will. :)
- jonursenbach 18y agoThe fact that Amazon has a handful and Netflix has 45+/- distribution centers shows how inefficient the USPS mail system has gotten compared to the likes of UPS and FedEx. Amazing.
- wmf 18y agoI don't understand how that conclusion follows from the data. Amazon and Netflix have totally different shipping patterns and business models. Nobody forced Netflix to use USPS; if UPS/FedEx was better for them I'm sure they'd use them.
- jonursenbach 18y agoI can't _ever_ see Netflix using UPS/FedEx due to the logistics on the shipper side. The mail is already going to your house, so having a movie dropped in your mailbox isn't going to make a difference. However, if Netflix were to use a shipper like UPS or FedEx, then they would need to drive their truck to your house just to drop off a disc. That's ridiculous. All of these people balking at the high carbon footprints of these companies would have a fucking field day.
- wmf 18y agoSeveral states are trying to change their tax laws to collect sales tax on Amazon; if they succeed then Amazon can go ahead and buy Netflix.