1. How serious is the threat of an onine sales tax to Amazon? How would sales be
ID: 1206719 • Letter: 1
Question
1. How serious is the threat of an onine sales tax to Amazon? How would sales be affected if Amazon were required to collect sales taxes in all states? How would profits be affected?
2. What overall nonmarket strategy is Amazon using to deal with the sales tax issue? What is its relation to its market strategy?
3. Is Amazon acting responsibly in terminating its relationships with associates in states that enact an Amaazon tax?
4. Should Amazon have closed the warehouse in Texas?
5. What should Amazon do in California? Should it continue with the ballot initiative? Was its moratorium proposal wise?
6. What strategy should Amazon adopt to address the online sales tax issue at the federal level?
Explanation / Answer
(1) The online sale tax to Amazon is a serious threat as the reduction in tax is high due to rise in sales of Amazon. The sales is not affected as the increase in sales takes place. It shows inc rease in revenues by the firm which has raised the income of the company.
(2) The overall nonmarket strategy used to deal with sales tax issue is that there is more transportation charges due to rise in consumption by consumers.
(3) The Amazon is acting responsibly in terminating its relationships with associates in states that enact an Amaazon tax.
(4) Amazon should not close warehouse inTexas. The business earns revenues at high rates and can recover from loss
(5) The Amazon should work more towards promoting its business in California due to increase in competition in the market. It should continue with the ballot inititative. It was a wise moratorium proposal.
(6) The strategy adoptd by Amazon to address online sale tax issued at federal level should be rise in the sales and price of the product. The reveneus earned should be used for future increment and investment.
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