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Amazon.com appeals to voters to overturn sales tax

BY HBSDealer Staff

The Los Angeles Times reported that Amazon.com will continue to fight against a California law passed July 1, which requires the company to collect a 7.25% sales tax. Amazon said that the law is unconstitutional, and has now announced that it will make the case against the sales tax to voters, in hopes that they will vote to overturn it. According to the Times, Amazon’s approach of appealing to the voters directly will likely be less costly and more effective than filing suit to block the law. 

The new law requires all retailers with affiliates in California to collect the state sales tax, whereas before, the tax was only applied to Internet retailers that had “a significant physical presence,” the Times reported. In order to avoid collecting the tax, Amazon has cut off its affiliation with 10,000 small businesses whose websites link consumers to Amazon. 

The main opposition to Amazon’s refusal to collect the tax, the LA Times said, comes from California merchants who believe that retailers operating solely on the Internet will gain an unfair advantage by avoiding collection of the sales tax. Target, Sears, Wal-Mart and Best Buy are among the many major retailers against which Amazon would have to fight in order to continue to avoid collecting the California sales tax. Additionally, the Times said, those in favor of collecting more taxes in order to fund health, social services and welfare will also likely vote against overturning sales tax collection.

The Times quoted Kathryn Gallagher, spokeswoman of Home Depot, who said: “We believe Amazon should collect sales tax because it levels the playing ground for all retailers, small and large.” 

However, the Times said, though the odds are slightly against Amazon prevailing, the company does have a large base of customers likely to vote in favor of overturning the sales tax law. The Times also quoted George Runner, a member of the California Board of Equalization, who said: “Californians are losing jobs and income as a result of the so-called Amazon tax,” and added, “It should come as no surprise that impacted California business owners would seek its repeal.”

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Fastenal shows strong sales and earnings growth

BY HBSDEALER Staff

Winona, Minn.-based Fastenal has reported second-quarter net earnings of $94.1 million, up 36% from $69.2 million in the second quarter of 2010.

Net sales for the quarter ended June 30 totaled $701.7 million, up 23% from $571.2 million in the year-ago period.

For the first six months of 2011, net earnings were $173.7 million, up 39% from $125.2 in the first six months of 2010. Net sales in this period totaled $1.34 billion, up 23% from $1.09 billion in the same period last year.

During the first six months of 2011, Fastenal opened 75 new stores, compared with 45 new stores in the same period of 2010. 

 

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Greatwide announces new CEO

BY Allison Har-Zvi

On July 11, Greatwide Logistics Services announced the selection of John P. Tague as its new CEO. Mr. Tague comes to the new position after eight years with United Airlines, where he served as President as well as other senior leadership positions including Chief Operating Officer and Chief Revenue Officer. 

Tague will succeed Leo Suggs, who is retiring from the position of CEO at Greatwide. Suggs’ accomplishments include over fifty years’ experience in the business of transportation and logistics, the introduction of organic growth initiatives at Greatwide, and his successful leadership of the company through the 2009 freight recession. Mr. Suggs joined Greatwide in 2009 as Executive chairman, became CEO in 2010, and will continue to serve as Chairman of Greatwide after his retirement from the CEO position. 

Dallas-based Greatwide is a privately held third-party logistics provider serving the United States and Canada.

 

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