Will the US implement a tax on online orders? Amazon sellers' costs will increase!

According to foreign media reports, local legislators in New York, USA, are drafting a proposal that will impose an additional tax of US$3 per package on all online orders delivered to New York customers!

The reason is that the New York Metropolitan Transportation Authority (MTA) is facing a high deficit due to the reduction in revenue caused by the epidemic and the huge additional costs brought about by epidemic prevention work. The entire bus and transportation system has carried out large-scale layoffs and route/service reductions.

In this case, the MTA has applied for an emergency funding injection from the federal government, but this is a one-time policy that cannot solve the MTA's long-term huge investment problem. Therefore, the state legislature is drafting a law that imposes an additional tax of $3 on all online shopping orders delivered and distributed locally in New York , which is expected to bring the MTA about $1 billion in revenue each year.

An MTA spokesperson said: "On average, 1.8 million packages are delivered to New York apartments and homes every day. Online shopping is cheap and convenient, but it also means that delivery trucks are everywhere on our city streets. More and more trucks are clogging up city traffic, slowing down buses, and causing pollution. Maintaining these traffic conditions will incur huge costs. Currently, the MTA is responsible for this, and in the future, it may get worse, and e-commerce platforms' online shopping orders need to be responsible for this."

The relevant legislative bodies also stated that this surcharge will be borne by the buyers, which will make them more likely to consider visiting nearby physical stores when they need to shop, rather than ordering products on Amazon or Walmart. Boosting the local real economy can also solve local employment problems.

At the same time, the package-based billing model also allows customers to choose services that package and deliver multiple products together when shopping online, such as Amazon Day, etc. This can also effectively reduce the delivery workload and the impact on the transportation environment.

This bill is currently on the legislative agenda. If federal subsidies are not available in time next month, the bill will most likely be accelerated to help the MTA solve its deficit problem. Otherwise, New York City will face a 40% reduction in public transportation services and tens of thousands of bus system employees will be laid off.

This $3 tax is actually more like a surcharge, which is different from the normal VAT and consumption tax collection methods. I guess Amazon cannot directly deduct money from eligible orders.

However, the problem is that even if sellers do not need to bear the fees, consumers will definitely consider the $3 cost when purchasing, which will indeed have an impact on the seller's order volume. If they want to maintain their previous order levels, some sellers may have to lower their prices to remain competitive.

Therefore, sellers still need to consider this potential cost expenditure, look at the proportion of their orders delivered in New York, and plan the next operation ideas and plans. Do you need to open up new products/new categories? Do you need to prepare new trademarks? The European site has performed very well this year, is it time to open up new markets? All these things need to be prepared in advance.