No sales tax = smart

I was cruising around this morning checking out some potential after-Christmas deals on digital cameras and ended up over at (more on why below). And on the product page”s rundown of the cost they included a big “No Sales Tax” reference.

Of course, I prefer to not pay sales tax directly on my online purchases, but rather report such purchases on my state income tax forms and pay the applicable use tax all at once. So it struck me as interesting that a real-world retailer – which must collect sales tax for purchases by people in states (such as Georgia for Wolf) where they have a physical presence – would promise No Sales Tax Checking out their sales tax policy, this is what they say:

You never pay sales tax! We are not required to collect sales and use tax on deliveries throughout the US, except where we have business locations and in those states we pay ALL sales taxes (California, Georgia, Kansas and Maryland). For customers in these states, our price includes all applicable taxes. To satisfy Maryland consumer reporting rules, we will show sales tax and an amount equal to the sales tax will be discounted from our regular low price. The order total will be the same as our regular low prices without tax.

Smart. Rather than dealing with “do you have to pay sales tax?” screens and downplaying (ala the fact that you may, indeed, have to pay sales tax, Wolf just absorbs the tax when applicable and gets to promote the whole No Sales Tax thing prominently.

Of course, their price was $50 higher for the same camera I was looking at on Amazon, which never collects sales tax. So thanks, but no thanks.

I ended up at Wolf, though, because of a new shopping habit I have. For a long time I”ve taken the model number of an item I”m looking at and run it through Froogle to get a price comparison. But now I go right to the “Google Checkout Stores” link to narrow my search. The promise of an extra $10 off (right now) is a strong draw to Checkout, which of course is part of Google”s strategy for taking payment share from PayPal, VeriSign and everybody else in the payment space. They”re also giving the service away to merchants for now, which may do wonders for their market share over the next year.

The last time I bought something through PayPal? Couldn”t tell you. They do fabulous things like not allowing two people (such as the wife and myself) to use the same credit card number. Sites that feature PayPal come off as amateurish and I avoid them. I don”t get that feeling with Checkout. It”s a breeze to use and feels like a regular shopping cart service. I don”t have to set up accounts at a bunch of different merchants (or give them my credit card number), and Google is better at getting receipts out and tracking purchase and delivery than a lot of online stores.

So keep an eye on Checkout. Google needs another revenue winner (I remember a time when Wall Street really didn”t like companies that relied on one source for 98% of their revenue), and payment processing is a big space. PayPal is a billion-dollar product and is a key part of eBay”s model now. Done right, Checkout could be a strong No. 2 product for Google.

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