Seeking Alpha

Amazon (AMZN +0.4%) discloses that it received a $269M tax bill from the state of Arizona for...

Amazon (AMZN +0.4%) discloses that it received a $269M tax bill from the state of Arizona for unpaid online taxes over a 5-year period for transactions from four distribution centers it operates in the state. Last year, Amazon reacted to a $269M tax bill from Texas by closing down its Dallas warehouse.
Comments (39)
  • Stone Fox Capital
    , contributor
    Comments (6702) | Send Message
     
    wouldn't that wipe out their income? lol

     

    Let them leave. It's crazy that AMZN has an unfair advantage to other retailers. Make sales tax all or none.
    2 Feb 2012, 02:48 PM Reply Like
  • Windsun33
    , contributor
    Comments (4280) | Send Message
     
    I don't see the Dallas scenario happening here. Arizona is one of the largest distribution centers that Amazon has, and it would be pretty expensive to move it. I do wonder about how valid that $269 million tax bill is, I suspect they are trying to collect taxes on everything shipped, in or out of state.
    2 Feb 2012, 02:49 PM Reply Like
  • louis444
    , contributor
    Comments (5) | Send Message
     
    Wow, tax evasion never looks good for any corporation. It is time for Amazon's tax advantage over mom and pop shops to come to an end. $269M works out to much of their profits from 2011.
    2 Feb 2012, 03:55 PM Reply Like
  • Windsun33
    , contributor
    Comments (4280) | Send Message
     
    Be careful what you wish for. If this ends up passing the smell test, you had better be prepared to pay from 4% to 9% more for all online purchases. Amazon and the jilloin other online stores do NOT pay sales tax - they COLLECT it from the customer - which is you and 5 billion other folks.
    2 Feb 2012, 04:03 PM Reply Like
  • JayXu
    , contributor
    Comments (266) | Send Message
     
    How come the market doesnt respond to the new?
    2 Feb 2012, 03:55 PM Reply Like
  • Poor Texan
    , contributor
    Comments (3533) | Send Message
     
    Amazon will settle for a fraction of the cost as Arizona can only press up to a point on a constitutional issue. Just political posturing.
    2 Feb 2012, 04:04 PM Reply Like
  • jetzoom
    , contributor
    Comments (33) | Send Message
     
    This is just the tip of the iceburg for Amazon...they will be paying tax in every state as their unfair advantage is closing down the brick and mortor stores...every state will be looking to get sales tax from Amazon...I would not own this stock.....
    2 Feb 2012, 05:27 PM Reply Like
  • Windsun33
    , contributor
    Comments (4280) | Send Message
     
    Amazon collects the sales tax, the sales tax is not an expense for Amazon - it is an expense for the buyer. B&M stores collect it when you buy, but selling across state lines has always been exempt from local taxes - one reason why catalog sales were so popular in the days before the internet.

     

    While10 years ago the "tax free internet" made some sense, I think the situation has changed. And states are a lot more desperate for cash right now also.
    3 Feb 2012, 12:17 AM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    How is Amazon trading at a Market Cap of $81B?

     

    a) 2011 Earnings = $632M
    b) Current Market Cap = $81B
    c) Cash on Hand = $9.5B
    d) Shares Outstanding = 454.75M (and rising)

     

    e) Cash on Hand per Share = c / d = 9.5 / .45475 = $20.89

     

    f) Calculated business value without cash per share based on current $81B market cap = (b - c) / d = (81 - 9.5) / .45475 = 71.5 / .45475 = $157.23

     

    g) Business without cash P/E = (b - c) / a = 71.5 / .632 = 113.13 P/E

     

    Most solid private businesses are purchased in the 6 - 8x earnings range. That would give Amazon a private value of around:

     

    (6 * a) + c = (6 * .632) + 9.5 = 3.8 + 9.5 = $13.3B
    (8 * a) + c = (8 * .632) + 9.5 = 5.06 + 9.5 = $14.56B

     

    $13.3 - 14.56B

     

    News flash - Amazon is trading at levels it will not sustain. Why are people paying for growth in Amazon, when Amazon just released reduced 2011 Earnings - half of 2010 Earnings.

     

    Amazon will be the crashing Netflix of 2012. Market Cap will drop substantially. 2011 P/E of 113 - are you kidding me?!?!

     

    At the end of the day you have to perform - See Miami HEAT.

     

    What's the point of owning a business (via stocks) if it doesn't make you money. 2011 earnings are half of 2010 - where's this growth I'm paying for? AMZN failed to show any profit growth.

     

    I'd be thoroughly pissed off if I purchased this company and had to wait over 100 years to get back my original investment.
    2 Feb 2012, 06:31 PM Reply Like
  • quincy99
    , contributor
    Comments (103) | Send Message
     
    Myopic view looking at 2011 vs 2010. They are SPENDING money to GROW the business. And Amazon is still cheaper even with sales tax. Consider TOTAL COST, gas driving to brick and mortar, time spend doing so, free shipping etc. So in two years when Amazon has its hooks into a gigantic customer base with the Kindle Fires they are giving away, streaming movies, selling online books, with no brick and mortar electronics stores left after Best Buy folds. How does that business model look now? And the stock price will be over $300. Take a look at Apple and Google. That's how they did it.
    3 Feb 2012, 08:51 AM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    That's actually not how GOOG or AAPL did it at all. AMZN has yet to prove sustainable profit growth. Betting on potential FUTURE profits is exactly that, Betting - See Gambling.
    3 Feb 2012, 12:56 PM Reply Like
  • quincy99
    , contributor
    Comments (103) | Send Message
     
    And based on the last two days of action, the stock is obviously under heavy accumulation.
    3 Feb 2012, 04:28 PM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    Based on 2 days?! Are YOU serious right now? Did you know that the market is open for a lot longer than 2 days?

     

    The floor is going to drop out from right underneath you and you're not going to have a clue why.
    3 Feb 2012, 05:29 PM Reply Like
  • Windsun33
    , contributor
    Comments (4280) | Send Message
     
    (AMZN) is pretty bad - that explains why it is up 5%+ in 2 days on 30% higher than average volume.
    4 Feb 2012, 02:26 AM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    Awesome! Way to think 2 days is representative of things to come.
    4 Feb 2012, 09:32 AM Reply Like
  • quincy99
    , contributor
    Comments (103) | Send Message
     
    And by the time Amazon's sustainable profit growth is proven to your satisfaction, the stock price will be $350. Too late to the party for you!
    3 Feb 2012, 04:26 PM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    Sustainable Profit Growth? You mean what AMZN has been trying to, but failed to do over the past 10 YEARS?

     

    This bad boy is going DOOOOOWN!
    3 Feb 2012, 05:31 PM Reply Like
  • scott trader
    , contributor
    Comments (5306) | Send Message
     
    it survived the great dot com bust....must have been just luck ....where has the stock gone since then///// pull up a chart.....
    3 Feb 2012, 07:52 PM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    Makes sense. Let's go back and look at history on a chart. That definitely will tell us where AMZN is going. I suggest you do your due diligence and look at actual business performance, not some chart and technical analysis. You and everyone else is going to get caught with their pants down when someone with a HUGE stake in AMZN realizes what they actually own - a $20B company at best.
    4 Feb 2012, 09:31 AM Reply Like
  • Windsun33
    , contributor
    Comments (4280) | Send Message
     
    Looking at past history only tells you what happened in the past. It was not that long ago that both Google and Apple were trading at P/E's of 250+. Trying to predict the future from the past is like the French generals in WW2 fighting as if it was WW1 all over again.
    4 Feb 2012, 10:45 AM Reply Like
  • Krusty007
    , contributor
    Comments (30) | Send Message
     
    When everybody will realize that short term earnings were depressed due to stellar investments the company will be worth $150B
    4 Feb 2012, 12:29 PM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    Short Term earnings? I think you mean for the past 15 years. Doesn't seem to short does it?
    4 Feb 2012, 12:37 PM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    AMZN = $50/share at best - Seriously

     

    Besides the $9.5B in cash that they'll never give to shareholders and the $10B Actual Business Value of Amazon, there is nothing else holding the current Market Cap north of $80B.

     

    AMZN = $20B Actual Business Value at best. There are roughly 450 Million (and growing) Outstanding Shares. Divide $20B by 450M and you get about $45. I'll be generous and give you a stock price value of $50. But that's it, people! Stop letting your hard earned money go to waste. You will get burned and so will your retirement funds. Leave something to your grandchildren!

     

    AMZN produces next to nothing in earnings. As a percentage, CAPEX grows more than REVENUE. Amazon just announced that 2012 Q1 will be coming in at negative earnings.

     

    Don't be fooled by the "we are investing for the future" BS that this company has been selling you for over 15 years.

     

    EARNINGS are what make shareholders money, not REVENUES. I can buy Nikes all day long at retail and sell them to you at that same retail price. I've increase my revenues, but I haven't made a profit. In fact I've lost money if you consider my time spent buying and selling Nikes to be worth anything. AMZN does the SAME thing. Wake up People!
    4 Feb 2012, 12:38 PM Reply Like
  • scott trader
    , contributor
    Comments (5306) | Send Message
     
    amzn is growing customer base.........facebook is gathering eyeballs....they will figure out how to monetize it,,,,,increase margins....
    4 Feb 2012, 03:54 PM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    I think you mean - "[I HOPE] they will figure out how to monetize it"

     

    Congrats on buying a business based on HOPE. Next time around, after you've scrounged up some cash from the aftermath of AMZN's busted bubble, you might want to think about buying into a company that produces actual earnings.
    4 Feb 2012, 04:54 PM Reply Like
  • scott trader
    , contributor
    Comments (5306) | Send Message
     
    since 2008 have bought and sold amzn prob thirty times amzn is a great trade.....I've made alot of money.....why the venom.....
    4 Feb 2012, 05:10 PM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    I rest my case.
    4 Feb 2012, 05:20 PM Reply Like
  • scott trader
    , contributor
    Comments (5306) | Send Message
     
    keep it simple,,,fyi since you are so distressed and concerned ....esp. about amzn......90 percent of my investment portfolio in aapl.... I rest my case....long west coast tech.....
    4 Feb 2012, 07:57 PM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    90% doesn't leave much room for uncertainty. I love AAPL but that sounds like a foolish approach.
    5 Feb 2012, 08:21 PM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    Even Barrons is now skeptical of Amazon & Bezos - http://on.barrons.com/...
    4 Feb 2012, 01:55 PM Reply Like
  • Windsun33
    , contributor
    Comments (4280) | Send Message
     
    If you don't believe in Amazon, simply don't buy the stock. No need to get all rabid about it.
    5 Feb 2012, 12:55 PM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    Nah, man. I'm shorting it. I will eventually buy it, but at a MUCH lower price than you ever did.
    5 Feb 2012, 08:22 PM Reply Like
  • Windsun33
    , contributor
    Comments (4280) | Send Message
     
    And that pretty much shows what little you know about me, or any of the other people here.
    5 Feb 2012, 10:55 PM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    I'm sorry, why would I care to know anything about you? I'm not on here to get to know people. I'm on here to tell you that AMZN's Market Cap is $65 Billion Dollars of Hope and $20 Billion of Actual Business Value, including $9.5 Billion in cash.
    5 Feb 2012, 11:28 PM Reply Like
  • Windsun33
    , contributor
    Comments (4280) | Send Message
     
    Considering that I bought my 300 (AMZN) at $53.40 I suspect you don't have a clue about what I bought it for.
    6 Feb 2012, 12:44 AM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    Why would I know that or care to know that? Anyway, you should get about what you paid for it after Big Money drops AMZN.
    6 Feb 2012, 10:31 AM Reply Like
  • Windsun33
    , contributor
    Comments (4280) | Send Message
     
    Your quote: " I will eventually buy it, but at a MUCH lower price than you ever did..."
    6 Feb 2012, 10:53 AM Reply Like
  • Keep It Simple
    , contributor
    Comments (482) | Send Message
     
    Yeah, that's shorting 101. I have to buy it at some point so I can give it back to the lender I borrowed it from.
    6 Feb 2012, 11:21 AM Reply Like
  • scott trader
    , contributor
    Comments (5306) | Send Message
     
    KIS..I AM AN AMZN LONG..... R U SHORTING? OR JUST A CRITIC ...
    5 Feb 2012, 11:43 PM Reply Like
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