There's this nasty rumor going around that Amazon may be in talks to purchase Netflix for $1.5 billion or so. The rumor was enough to drive Netflix stock up yesterday by about 5 percent or $1.06.The San Jose Mercury News has already reported that spokespersons for Netflix and Amazon have already dismissed the rumor as, well... as a rumor. Of course, that's exactly what they would say even if there were some truth to it.
But there's at least one good reason to think this deal may be nothing more than idle speculation. Right now Amazon can sell products to buyers in most states without charging sales tax. But U.S. law says that if you have a bricks and mortar operation in a state, you have to charge sales tax. Since Netflix has 43 distribution centers across the country, that could mean Amazon would have to begin charging sales tax to millions of customers.
Reader Comments (Page 1 of 1)
6-07-2007 @ 2:38PM
navstar said...
I already pay tax for both Amazon and Netflix purchases. So what?
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6-07-2007 @ 2:44PM
Brad Linder said...
Amazon has about 8 distribution centers. Netflix has 43. Buying Netflix would give Amazon bricks and mortar operations in far more locations across the country and increase the number of customers the company has to charge tax.
Delaware, by the way, doesn't charge sales tax.
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6-07-2007 @ 3:09PM
Ray Cornwall said...
That last bit makes no sense. Amazon has distribution centers, too (one's in Delaware- they advertised on Monster.com for new employees all the time).
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