Online retailers may soon have to collect sales tax. Amazon, oddly, is gloating
AMAZON, which became America’s biggest internet retailer by selling things more cheaply than anyone else, used to go to great lengths to avoid collecting sales tax from its customers. It issued a map showing employees which states to avoid lest they give the authorities a target for enforcement (some of the biggest states were coded red). In 2011 it shut down a warehouse in Texas after the state’s government demanded $270m in back taxes.
The taxmen are now catching up. On May 6th the Senate is expected to approve a bill requiring internet merchants to collect sales tax due in other states. The House of Representatives may follow. Politicians are heeding howls from bricks-and-mortar retailers that current law gives Amazon and its kind an unfair advantage. State governments reckon that tax avoidance by online retailers costs them roughly $11 billion a year. If the Marketplace Fairness Act passes, states will get some extra cash. Yet Amazon is unruffled.The Seattle-based super-merchant is already collecting tax in some big states, including California, Pennsylvania and Texas, and is no longer fighting a national regime. Best Buy, an electronics retailer that has suffered much from Amazon’s onslaught, says its sales rose by 4-6% in states where Amazon started collecting tax. But there will be no let-up for old-school retailers. “Closing the loophole won’t level the playing field,” says Sucharita Mulpuru of Forrester, a research firm. Amazon’s retreat on taxes signals a redoubling of its logistics offensive, thumping rivals even harder.
About bambooinnovator Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments.
KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community.
KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.
H.E.R.O. stands for “Honorable. Exponential. Resilient. Organization.” and is operationalized into a unique, systematic 4-step investment process to identify the winners. The investment objective seeks to capture long-term investment returns created by disruptive forces and innovation by focusing on high-quality and liquid listed equities in the Asia-Pacific region that ride on and benefit from them. Through our cross-sector and in-depth fundamental research process, the Fund aim to provide access to companies whom we believe are run by high-integrity, honorable and far-sighted owner-operators with a higher sense of purpose in solving High-Value Problems for their target customers and society, and have unique, scalable and wide-moat business models with sustainable competitive advantages and innovative products, services, and processes to create, expand and service their total addressable market, including the resiliency and balance sheet strength to maintain or grow profitability, pricing power and market positions through up/downturns in the economy.
About bambooinnovator
Bamboo Innovator 