Posted on 02/09/2008 7:55:22 AM PST by Behind Liberal Lines
If you buy books, movies or other items from Amazon.com, be prepared to pay more soon.
The online retail giant isn't raising prices.
Gov. Eliot Spitzer is raising taxes - at least he hopes to.
Spitzer has proposed closing a loophole in state tax law that allows out-of-state Internet retailers - Amazon.com being the biggest by far - to avoid charging sales tax to New Yorkers for online purchases.
Rather than pay tax when they buy online, New York residents are supposed to account for the sales tax on their personal income tax returns. Few do, and the state loses millions.
If the Legislature approves Spitzer's proposal, New York will be the first state nationwide to force out-of-state companies to collect taxes.
"It would be unique in the country," said Paul Misener, Amazon's vice president of global public policy. "This would be the first time any state has attempted to do this, even though other states have considered it."
Spitzer is pushing the measure to help close New York's projected $4.4 billion budget shortfall. Closing the loophole would net the state $47 million in sales tax revenue next year and $73 million the following year, budget officials said.
Even though some have dubbed the tax the "Amazon tax," New York residents - not Amazon - would pay the sales tax bill.
Sales tax "already applies to virtually all Internet sales," Spitzer said recently. "It doesn't apply to Amazon.com. Why? They pretend that they don't have any presence in the state of New York."
Amazon.com is headquartered in Washington state. Washington residents who shop on the Web site pay sales tax because the company has a facility in that state, Misener said. Internet retailers typically charge sales tax only in states where they have distribution centers or sales staffs.
Spitzer said eight of the 10 largest Internet retailers, including BarnesandNoble.com, Staples.com and Sears.com, charge New York customers sales tax. All have facilities in the state.
Amazon runs no facilities in New York, so company officials argue that Amazon has no obligation to collect sales tax here.
The Spitzer administration feels differently. The governor contends that Amazon does have a physical presence in New York in the form of "affiliates," or people who advertise Amazon.com and its products on their Web sites.
Affiliates earn commission from Amazon when customers link to the Web site from affiliate Web sites. That essentially makes affiliates in-state salespeople, Spitzer said.
"They are characterizing these Amazon associates as agents in New York selling on behalf of Amazon," Misener said. "It's much more like advertising in New York. Many of them are mom-and-pop sorts of Web sites: the local club or community center or archdiocese."
Spitzer argues he is looking out for the mom-and-pop businesses - the ones located in New York.
"If you talk to any bricks-and-mortar retailer here in the state, they will say, 'Why are we withholding and paying when Amazon is not?' " Spitzer said.
That's exactly what Erika Davis, owner of Creekside Books & Coffee in Skaneateles, said.
"We're all for it, and we certainly think it's fair that Amazon charge sales tax like us," Davis said. "It makes sense for independent sellers that already have serious competition, especially from the Internet."
Customers, understandably, try to save money, Davis said, and small retailers such as Creekside have a hard time competing with online giants who can offer products free of tax.
"Let merchants compete on service, price and product, not tax policy," said James Sherin, president of the Retail Council of New York State. "It (is) absolutely essential to the future of brick-and-mortar retail in New York state."
Of course, if Spitzer thinks it is unfair that "mom and pop" stores in NY have to pay higher taxes than Amazon, there is a very simple solution: CUT NYS TAXES GOVERNOR!
So he is bring this up again? I thought it got tabled just a few months ago. I mean it was like the drivers lic. thing and Spitzer backed down.
NYS taxing amazon ping to my CoE list
He’s just a raging socialist. It has nothing to do with fairness to “mom and pop” stores.
Go f@ck yourself, Spitzer!
The reason you have Amazon is for a better price. Publishers set the price.....perhaps Spitzer should start there rather than on one of the countrys successful dot coms. Cut the free hand outs for the lazy first Spitzer......
I have noticed already that many online retailers are collecting sales tax - so this is not a surprise.
And in reality, if sticking to the letter of the law, you are still suppose to pay the sales tax, even if the retailer doesn’t collect it. Does anyone actually do it? I doubt it. So what this really is about is enforcement by making the retailers actually collect that tax.
But he's more than a spoilsport; he's a spoilsport with the authority of the state, and an ambitious one at that. And since the Good Ship Clinton hit the rocks, it's every man for himself (it is the Year of the Rat, isn't it?).
So he's almost as destructive.
OH - and I am not in any way in favor of collecting the tax, just pointing out the legalities...
Spitzer is ‘Cuomo-lite’.
If I were an Amazon exec, I would configure the Amazon firewall to block all connections from NY state, or redirect them to a page that says that unfortunately due to their governor, NY state residents will no longer be welcome. Let the angry locals deal with him.
I just found out that if you pay your Illinois income tax on line using Turbo Tax you will pay an Illinois sales tax.
It will fail.
I assume Spitzer will exempt drivers licenses purchased by illegals.
I guess reducing spending isn't an option.
I hate to admit it but the govenor makes a good point. Amazon should not charge taxes on things it sells from its warehouses since it has no presence in NY; however, a lot of the products Amazon sells are drop-shipped from businesses that do have a presence in NY. Not taxing those products does seem to be a fuzzy technicality.
I work for an online retailer. We collect sales tax when an order is from within our state. Collecting sales tax for 50 different states at 50 different rates (probably not the case, but software will have to be programmed to collect at the rate charged for each state) is a logistical nightmare. We already have a bit of a hassle because in our state different counties charge different sales tax, so that has to be accounted for. The state sales tax bureaucracy and reporting for one state is work...imagine if each online retailer has to do it for 50 states...it would be impossible. And who’s going to regulate and police the online retailers, they’ll have to develop a whole new department of state government to do this, and maybe that’s the point, LOL.
Not in Gnu Yak!
Another New York tax-mad socialist, in the image of “Proud-To-Be-A-Socialist” Chuckie. Just wait — if this country is STUPID enough to put a socialist in the White House, the Internet will be milked for money like an ole dairy cow.
A liberal-socialist ThugORat by any other name....
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