2. I'm not really convinced that "the sales tax hack wasn't worthwhile". How expensive would it be to spin off your mail order division? Lawyers might be expensive, but 7.25% of your revenue is also a lot of money.
Someone could click a link on an ad and be on your “catalog” and able to order with very low friction, rather than seeing an ad, ordering a catalog, getting the catalog, then calling in or mailing an order.
(Also, Amazon was initially specifically in books, and got started just after a few giants like B&N and Borders had crushed local independent bookstores and replaced them with giant, discounting, but more impersonal and on average more distant from the customer big box stores, so they were hitting a market uniquely (or at least particularly) primed for a convenient to access heavily discounting remote seller; not only was the internet a sea change
It isn't really an exemption, anyway, it is a limitation under then-existing federal law on the power of states to impose taxes.
> According to wikipedia, it includes "companies doing mail order, online shopping, and home shopping by phone".
That's misleading.
What it actually applied to, at the time, was companies without physical presence in the state into which the sale was being made. So companies that exclusively did those things would be covered (except in the State they operated from, but they could operate in a no sales tax state), but companies that did them alongside physical operations would not, and before the web, those other models alone had so much less access to customers that the sales tax hack wasn't worthwhile.
> Why did amazon dominate while sears languished?
Because while Sears also had mail order business, it was a ubiquitous brick-and-mortar retailer, and thus was paying sales tax on its mail order sales, because they had retail everywhere.