AMZN) 16-year holiday from collecting sales tax will come to an end - with unpleasant consequences for the online retailer.
The U.S. Supreme Court in 1992 established that only retailers with a physical presence (called "nexus") in a given state are required to collect a sales tax from their patrons. But with state budgets being squeezed, more and more legislatures are trying to rope in online retailers - especially Amazon, a company that was specifically engineered to profit from the Supreme Court's ruling.
"[Amazon CEO] Jeff Bezos has built a company strategically around avoiding sales tax. But they're going to have to deal with this," retail analystDavid Strasser, a managing director at Janney Montgomery Scott,told Forbes.