According to a recent observation, Amazon is experiencing the effect of collecting sales taxes towards online purchases.
Researchers published a paper at Ohio State University which indicated a decline in sales as states like California and Texas started demanding taxes for their online purchases.
For a long time, Amazon, like many other sites, relished huge benefits by not charging any sales tax at all, particularly in states like California where sales taxes are almost 10% in many places. In 2012 Amazon started collecting sales tax in Texas.
The report shows that imposing tax on households reduced their purchases by 10% as compared to the other states. The number fell to 24% for online purchases above $300.
After reaching an agreement with the State of Texas over the collection of sales tax, company has established many fulfillment centers, including 2 in Texas; Coppell and Haslet.