Life is good for Amazon. The company had over $17 billion in total net sales for the quarter ending on September 30, 2013. (That figure is more than 20% greater than its 2012 third quarter total net sales.) And as of Friday, November 22, Amazon’s stock is near all time highs, the company is rolling out new products like the Kindle Fire HDX, and the site is getting ready for a big holiday shopping season.
Recently, things have not been quite as good at The United States Post Office. Its 2012 fiscal year loss almost reached $16 billion, and earlier this year, it released a plan to stop delivering mail on Saturdays. But this downward spiral recently received a break from one of the world’s biggest corporations. Amazon and the Post Office are now teaming up for Sunday delivery in the New York and Los Angeles markets. Expansion into Dallas, Houston, and New Orleans is planned for next year.
The benefit for Amazon is clear- its customers can now have packages delivered every day of the week. This new option may have the biggest impact on Friday shoppers. Before Sunday delivery, people turned to traditional brick and mortar stores for items that they needed for the weekend. Now customers who absolutely, positively need season two of Downtown Abbey won’t need to hop in their cars. It’ll come on Sunday. Thank you, Amazon and the United States Post Office.
The Amazon deal represents a positive dealing with a government-regulated entity. The company is hoping for more of the same from the United States Supreme Court. On November 26, 2013, the Court held a private conference to determine if it wants to hear two cases involving state taxation of internet purchases. The first case, Amazon.com, LLC v. New York State Department of Taxation and Finance, asks whether a New York law violates the Commerce Clause by “imposing tax-collection obligations on out-of-state retailers that have no physical presence in New York.” The second case also involves New York law. In Overstock.com, Inc. v. New York State Department of Taxation and Finance, the issue is “Whether a business that has no employees or operations in a state is deemed to be physically present, and therefore subject to the state’s taxing power, merely by entering into contractual relationships with residents of the state who are not its legal agents.”
For guidance on these issues, the Court may look to a recent state case, Performance Marketing Association, Inc. v. Hamer. In Performance Marketing, the plaintiff challenged an Illinois state law which required “out-of-state internet retailers and serviceman” to “collect state use tax if they have a contract with a person in Illinois who displays a link on his or her website that connects an Internet user to that remote retailer or serviceman’s website.” The Illinois Supreme Court held that this law was preempted by the Internet Tax Freedom Act. Importantly, the Illinois justices did not rely on the commerce clause to strike down the tax. That will obviously limit the precedent’s use to Amazon if the Supreme Court takes its case.
*Stephen DeGrow is a third-year student at Wake Forest University School of Law and holds a Bachelor of Arts in Economics from Cornell University.