Shares of Amazon.com, Inc. (NASDAQ:AMZN) are under pressure in the wake of ruling from the Supreme Court. The High Court has ruled that states have a right to tax internet retailers regardless of whether or not the companies have a physical presence in the respective states.
Marketwatch has the details on the ruling and what it means for Apple and other e-commerce companies.
Amazon.com Inc. shares slid 1.3% Thursday while bricks-and-mortar store operators rallied, after the Supreme Court ruled that states have the right to collect sales taxes on internet companies that do not have a physical presence in their states.
The 5-4 ruling “would give every retailer the opportunity to compete on a level playing field without government’s thumb on the scale,” said the Retail Industry Leaders Association.
Amazon has dropped its resistance to state sales taxes in recent years, especially as it has expanded its footprint with warehouses and distribution centers. However, a loophole remained for third-party sellers on its e-commerce platform. It’s unclear how the new ruling will effect smaller sellers, but Institute for Policy Innovation president Tom Giovanetti is in the camp of those that sees it as a big problem for them.
“The decision leaves e-commerce and especially small sellers extremely vulnerable to states gluttonous for tax revenue particularly from consumers and businesses with no presence in their state,” he said in a statement. Moody’s lead retail analyst Charlie O’Shea notes that Amazon’s “proprietary sales will be largely unaffected” will be largely unaffected by the ruling.
Amazon.com, Inc. shares were trading at $1,733.00 per share on Thursday afternoon, down $17.08 (-0.98%). Year-to-date, AMZN has gained 48.19%, versus a 3.73% rise in the benchmark S&P 500 index during the same period.
AMZN currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #1 of 51 stocks in the Internet category.