Blue Apron’s Bad Recipe

As it soon goes public, Blue Apron needs more online sales to meet investors’ growth appetite. New York-based Blue Apron currently sales its meal-kits in 48 states that reach 99% of the US population, as disclosed in its recent regulatory filing.

Much like early Amazon, Blue Apron has the advantage of selling meal-kits without collecting sales tax, but that could change. In the ten states where it has a physical presence, Blue Apron must collect sales taxes from its customers.

Amazon, in its beginning, did everything to dodge collecting sales tax from customers to maintain competitively low prices. Blue Apron collects sales tax in states where it has offices or distribution centers, such as New York and Texas.

Blue Apron may need to collect sales tax if it expands operations into more states. Additionally, the S-1 warns that Congress could require companies to collect sales tax on Internet Sales.

Besides rising food prices, potential investors should consider the impact of sales tax on Blue Apron’s bottom line.