Amazon (NASDAQ:AMZN) Updates CloudFront, Collects Sales Tax in 14 States

Amazon (NASDAQ:AMZN) Updates CloudFront, Collects Sales Tax in 14 States
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Amazon NASDAQ AMZN Updates CloudFront Amazon (NASDAQ:AMZN) Updates CloudFront, Collects Sales Tax in 14 StatesNEW YORK – Earlier this week Amazon (NASDAQ:AMZN) announced they had added more functionality to their cloud service offering, CloudFront, in response to requests from their customers.  CloudFront has added support for five additional HTTP methods and users cannot only download content using CloudFront, but they can also upload content to origin servers via CloudFront edge locations.


The new release will help users improve the performance of the dynamic and interactive portions of their websites, such as ‘add to cart’ buttons.  The company said they had heard from many customers who do not actually use CloudFront but need to manage multiple domain names for their web application and suffer from slow performance when uploading content.  While other services have more functionality that CloudFront, the move to upgrade the service is a praiseworthy step by Amazon as it amounts to closing the gap with their competitors.

Meanwhile, the debate over Amazon’s prospects has been heating up as analysts are digging in their reasons why the stock will rise or fall.  In particular, those who are bearish on Amazon point to Amazon as a technology company who wastes most of their value added on low margin retail.

Another reason to be bearish on Amazon, at least in the near term, is that the company has started to pay sales tax in 14 states – Reuters reported that Amazon would begin to pay sales tax in Wisconsin on November 1.  The move will provide the state with $ 30 million in additional annual revenue.  However, it would appear that internet sales tax is here to stay, and it is only a matter of time before more states begin collecting sales tax on internet sales.

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According to a Fitch Ratings report, states that are not collecting sales tax from Amazon sales are missing out on $ 11 billion in annual revenue – it is believed this will have a marginal impact on profits.  Unfortunately, for Amazon the company turns a slim margin on online sales and while the sales tax is a pass through, the company will need to manage collection and disbursement of the tax and the additional administration will add to the cost of sales.

Shares of Amazon were almost 6 percent for the week, closing at $ 328.93.