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Jet + Walmart = more sales tax collection?

 Walmart to acquire Jet.com

Jet.com introduced itself to the world in 2015 as an Amazon competitor: an ecommerce blend of Costco and Walmart that offered online shopping with basement prices for members only. It soon dropped the membership fees, reduced the discounts, and planned to be making $20 billion in sales per year by 2020. Then along came Walmart with an offer Jet couldn’t resist: a buy-out.

Walmart has a booming business in its physical stores and an online presence that can’t compete with Amazon. Young Jet has ecommerce savvy that appeals to millennials and a shopping cart that reduces prices as items are added. Together they hope to do what they cannot do individually: slow Amazon’s increasing share of U.S. e-commerce sales” (Internet Retailer).

But there is rarely gain without pain. Jet stands to gain access to Walmart’s vast network of warehouses and storefronts. It should also be able to greatly expand its product offerings, which are reputedly limited now. In return, it could be forced to collect sales tax nationwide.

Lacking a broad physical presence, Jet currently collects sales tax in only seven states. Yet Walmart is located in every state. Once the acquisition is complete, Jet.com transactions may be subject to sales tax in all 50 states.

Details of the acquisition have yet to be worked out, but the CEOs of both Walmart and Jet say they are committed to “comply with all the regulations around sales tax” (Wall Street Journal).

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photo credit: Walmart via photopin (license)

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.