N.Y. Orders Large Web Retailers To Charge Tax

WCBS-TV ^ | 04/25/2008 | Tony Aiello

[jonyyeh]

NEW YORK (CBS) ― New York Internet shoppers, take note: in five weeks, sales tax-free shopping will end on many Web sites thanks to rewritten state rules that are trying to force Internet retailers to collect.

At Chrono Tech Watches in White Plains, Jerry Nally is glad the clock is ticking on many Internet retailers that don't charge New York sales tax. Nally says those so-called "e-tailers" steal his customers.

"They'll come in our store, look at our product, touch it, play with it, look at the warranties, then go back to the web and buy it tax free," says Nally.

For years, retailers with "brick and mortar" stores in New York, such as Wal-Mart, have charged sales tax on orders placed through their Web sites. Yet Amazon.com and other e-tailers with no physical stores have not charged the tax, much to the delight of Internet bargain hunters, like online shopper April Cantin.

"Coming here, you have to pay a lot of tax, when you pay on line, you pay nothing, just shipping and handling and the item," she says.

In the midst of a budget crisis, New York is now telling Amazon and certain other large Internet-only vendors they must collect state and local sales tax -- if they allow sales via "click-throughs" from New York-based Web sites. The new rule is set to go into effect on June 1.

The state estimates this new Internet tax will bring in $50 million this year and $75 million next year.

The Retail Council Of New York State hopes the new rule is the first step toward collecting sales taxes on all Internet commerce.

But the new rulings aren't sitting well with the Internet giants. Amazon, the largest Internet retailer, is objecting to the decision, saying "this is the wrong time to increase taxes on New Yorkers."

"You will drive people away. People are not going to want to shop online anymore," says Cantin.

Nally is hoping online businesses will comply, however, telling CBS 2 "it's about time!"

"I have to pay tax, and Amazon should pay tax, it's as simple as that," he says. "There's no reason for a difference."

(© MMVIII, CBS Broadcasting Inc. All Rights Reserved.)

[Lord_Calvinus]

I think it refers to websites, which are NY based, that have an Amazon banner on them. You click on it, get to Amazon, buy a product. Ergo, NY thinks it can somehow tax Amazon for it.

They obviously don’t know that you can simply type in the link (or cut and past it) rather than using the click through. I’m trying to figure out how NY can possibly even enforce it.

[buccaneer81]

In Virgina, if an e-tailer doesn't charge taxes, some like Nike do, you are required to pay this on your income taxes after you figure in your underpayment or refund.

They tell us to do that in Ohio, too. BWAHAHA!!!

Put me in the cell next to Wesley Snipes!

[Publius6961]

if they allow sales via "click-throughs" from New York-based Web sites.

Calling all Freeper Geeks...

Is it possible to place internet orders without using "click-throughs" from New York-based web sites?

[engrpat]

"I have to pay tax, and Amazon should pay tax, it's as simple as that," he says. "There's no reason for a difference."

This guys has it wrong, he doesn't pay the tax the customers pay the tax.

[Lord_Calvinus]

Yeah. Type: “www.amazon.com” instead of clicking on the banner for the ad.

[FreedomCalls]

Is it possible to place internet orders without using "click-throughs" from New York-based web sites?

Sure. Just go to Amazon.com directly instead of clicking on an Amazon ad on a different web site that's based in NY.

[eleni121]

Loony NYS ping

[Publius6961]

Sure. Just go to Amazon.com directly instead of clicking on an Amazon ad on a different web site that's based in NY.

Well, that just changes the question...

How does a user know that a web site is New York-based?

[AndrewB]

You're right but there's more....

You are already required to pax your state sales tax (use tax) on any purchase you make on the internet or otherwise. It's just that only retailers with a nexus (physical location) in your state are required to collect it from you.
This will probably end soon and internet retailers will have to collect sales tax from everyone that makes a purchase from them and remit it to the state and/or municipality in which the buyer lives.
A very complex and expensive proposition.

[an amused spectator]

Big Media is ALWAYS a cheerleader for mor and more and more taxes...

[eleni121]

Will the last one out of this American gulag please turn off the overtaxed lights?

[RightWhale]

As on the other thread, those web sites that have to collect tax won’t get any business.

[GovernmentShrinker]

Silly me thought that the Constitution put regulation of interstate commerce under FEDERAL law.

[steelie]

Phone in the order

[AndrewB]

Pardon my ignorance, but I thought technically companies are only required to PAY sales tax, which they pass on to customers. Isn't a store free to forgo collecting sales tax as long as it still pays the state?

Not so. The retailer acts as unpaid tax collector for the state.

[Lord_Calvinus]

Obviously, you are mistaken. I wonder how quick NY will act to close the “ad-click” loophole by forcing Microsoft to disable the “right-click copy shortcut” feature when they don’t see the revenue they were expecting.

[SeafoodGumbo]

Hopefully, this will demonstrably hurt New York enough that other states don't try to do the same. If the other states start to follow, look for a lot of businesses to relocate to just on the other side of the Mexican and Canadian borders.

Damn jackal-jawed politicians.

[kitkat]

***”Coming here, you have to pay a lot of tax, when you pay on line, you pay nothing, just shipping and handling and the item,” she says.***

What am I missing here? Shipping nd handling cost a lot more than sales tax does.

[TheBattman]

New York is easily the MOST screwed up state in the union.

Did you forget that California is still, technically, a state? At least for now...

[Lloyd227]

"Phone in the order"

*smile*

I'll be happy to help with that: 888-639-9750