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.
