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I'm sure that Amazon sees the internet sales tax loophole coming to an end. As states get more desperate for tax revenue, they'll be pushing hard to require internet sellers to collect and pay sales tax.

I don't know that this makes the Netflix rumor any more likely, but you can't just dismiss it based on sales tax implications.

Interesting. How many states does Netflix have tax nexus in? Amazon already has DCs in ten states.

there are 58 dvd distribution centers or hubs. most states have at least one.

Can you expand on what these consequences are a bit for those of us unfamiliar...?

Netflix has facilities in most states. Amazon would have to collect sales tax in most (if not all) of these states.

http://kara.allthingsd.com/20090714/amazon-buys-netflix-micr...

Doesn't Amazon have facilities all over the country as well?

Almost all of them are in places where there is no local or state sales tax.

One exception of course being WA (where Amazon has its corporate headquarters) which has a substantial sales tax but no income tax.