Amazon has long enjoyed an unbeatable price advantage over its
physical rivals. When I buy a $1,000 laptop from Wal-Mart, the company
is required to collect local sales tax from me, so I pay almost $1,100
at checkout. In most states, Amazon is exempt from that rule. According
to a
1992 Supreme Court ruling,
only firms with a physical presence in a state are required to collect
taxes from residents. Technically, when I buy a $1,000 laptop from
Amazon, I’m supposed to pay a $100 “
use tax” when I file my annual return with my home state of California. But nobody does that. For most people, then, most items at
Amazon are significantly cheaper than the same, identically priced items at other stores.