Amazon is Busy: Kindle Discounts, iOS Video App, and Sales Tax Implications
It’s that time of year: Through August 15th, Amazon is offering a 40% discount on the current entry-level non-touch Kindle to holders of its Amazon.com Rewards Visa Card. As David Carnoy reports on CNet, you could get a basic Kindle for as low as $47 (with ads, or $65 without). Quantities limited, use promo code KINDLE40 and pay with your Kindle Rewards card to qualify. (I applied for one a few days ago, but with my credit I’m probably out of luck.)
Carnoy coyly hints that this might mean the new Kindles will be announced by the end of the month. I don’t know about that, but I do know that if Amazon’s past behavior is any indicator, when and if they come out Amazon will be knocking a decent chunk off of the prices of these very same models of Kindle—so don’t feel too bad if you miss out on this offer.
Meanwhile, from TechCrunch and a number of other sites comes the news that Amazon has just released an Instant Video streaming app for the iPad. This means that Amazon Prime subscribers who enjoy Amazon streaming, or those who pay to rent or buy individual digital movies from Amazon, can now enjoy them on their iPad.
Amazon has long been fairly platform-agnostic, even after it launched its Kindle ereader, providing Kindle e-reading apps for just about every other major platform. In that light, it’s a little surprising to me that the company took this long to come out with a streaming app for the iPad. But then again, considering how big video could be as a killer app for the Kindle Fire, perhaps it’s not so surprising after all. The app only supports the iPad so far, and doesn’t allow streaming to Apple TV, but who knows where it might go next?
And finally from PaidContent comes a report that Republican Senator Jim DeMint of South Carolina is making alarmist comments about the Marketplace Fairness Act, legislation intended to force online retailers such as Amazon to pay sales tax everywhere. DeMint thinks it could be an undue burden to online businesses which could have to deal with literally thousands of tax authorities nationwide.
While some online businesses such as Overstock are opposing the law, Amazon actually endorsed it earlier this summer. It seems a little odd for Amazon to start begging legislators to throw it in that briar patch, given how long and hard it fought to avoid sales taxes in the past (going so far as to drop entire states from its affiliate program or threaten to close facilities and lay off workers), but Amazon almost never does something without good reasons.
Going tax-free has been a big advantage for on-line stores such as Amazon with few physical presences anywhere. Other on-line expansions of physical big-box stores, such as Wal-Mart and Best Buy, have to collect sales tax on every order because they have physical stores in every state. Amazon has only had to collect it in locations where it has physical facilities.
But if Amazon has to start paying state sales tax anyway, there’s nothing stopping it from opening its own boutique stores, providing places for customers to view and buy the latest and greatest in Kindle and other big-ticket goods, and have packages shipped for pickup. You can bet Amazon has had something like this in the planning stages for months, and already knows exactly what it’s going to do once all its on-line competitors are suddenly under those same sales-tax burdens without having made those plans.
Who knows what effects that might have on the e-book market? Now, granted, as non-physical goods e-books probably wouldn’t be taxed anyway, but if Amazon adds physical locations it could counter one of the few advantages Barnes & Noble currently has in the e-book sales race—being able to use its own stores as “showrooms” to sell its own e-books as well as e-book readers.
We live in such interesting times…