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Amazon battles state taxes
Online retailer Amazon.com (NAS: AMZN) is doing everything it can to avoid collecting taxes on sales made in different states. One way is by categorizing states as "bad," "good," or "neutral." Employees wishing to go to "bad" states would need consent from the company's manager or lawyers because the employee's presence within the state might trigger laws that would force the company to collect sales taxes.
Such measures allow Amazon to sell goods at lowers price than state retailers because it doesn't have to add the sales tax, which in some states can be up to 8%. Many states don't like this situation. According to a study by the University of Tennessee, governments will lose $10.1 billion to $11.3 billion in sales taxes not collected by online retailers. Some states have passed laws dubbed "Amazon laws" to curtail this effect, but Amazon has responded with lawsuit challenges. Read more atThe Wall Street Journal.
MasterCard profit unexpected
Despite numbers suggesting that the economy had slowed down, MasterCard (NYS: MA) had a 33% increase in profit, which means an increase in transactions. The company reported a second-quarter net income of $608 million, or $4.75 per share, up from $458 million the previous year. Earnings beat analyst expectations, especially as its cross-border business grew. Rival Visa also announced better-than-expected earnings, marking a change in consumer behavior. Read more atReuters.
Not AAA appropriate
During debt negotiations, one of the looming worries was that the U.S. would lose its cherished AAA credit rating. But most of the country's biggest corporations don't have this rating anymore. In fact, only four corporations can boast this rating: Automatic Data Processing (NAS: ADP) , ExxonMobil (NYS: XOM) , Johnson & Johnson, and Microsoft (NAS: MSFT) . In the 1980s, around 60 companies had the rating.
On Wall Street, a AAA credit rating is now seen as a straitjacket that forces them to take a more conservative approach to sustain the ratings. Experts say being downgraded a notch has not had much impact on their operations and some of the best-regarded companies, like Berkshire Hathaway, General Electric (NYS: GE) , and Pfizer, all lost their top rating yet continue to be strong. Read more atThe New York Times.
Research In Motion set to improve
After losing ground in smartphone operations, Research In Motion (NAS: RIMM) announced it would simultaneously be releasing three new versions of its BlackBerry phone. The company's move is an attempt to battle the Apple iPhone. The RIM phones will all have the new BlackBerry 7.0 platform and run on 225 carriers, some starting next week.
This will be the first release since August 2010. RIM has been losing sales in the U.S. mainly to Apple and Google's Android platform. The release comes at a critical time, after the company announced it would cut 2,000 jobs to rein in costs. Read more atBloomberg.
New mileage rules and fears about China
At an auto conference in Michigan, Fiat and Chrysler Group CEO Sergio Marchionne said new fuel economy standards imposed by the government are very reachable. The White House proposed that new cars and trucks should get 54.5 miles to the gallon by 2025. Marchionne also said the drive to reach these standards would be extremely beneficial to the auto industry.
Marchionne also said the American auto industry could be threatened if China decides to export cars. He said Western countries must make their auto industry more competitive. He added that automakers have to stop relying on Asian subsidiaries and instead bring a renaissance of the American industry. Read more atThe Wall Street Journal.
So there you have it, the top financial stories for this afternoon. Check Fool.com throughout the day for commentary on these and other stories. Also, follow us on Twitter, on Facebook, or through our email digests.
At the time thisarticle was published Michelle Zayedowns no shares of any companies mentioned in the story.The Motley Fool owns shares of Microsoft and Research In Motion.Motley Fool newsletter serviceshave recommended buying shares of Automatic Data Processing, Amazon.com, and Microsoft.Motley Fool newsletter serviceshave recommended creating a covered collar position in Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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