WTF?! All Goods Shipped to NY to Be Taxed
I have to say I almost tossed my laptop across the room this morning when I read this. The blood sucking, money grubbing, glutinous swine in Albany (Get my anger?) has passed a so called “Amazon Tax” that would require any company – regardless of presence in the state – to collect sales tax on goods that are shipped to the state!
With the passage of the hotly debated state budget last night, New York legislators approved a bill that will require many online retailers to begin collecting sales taxes on purchases shipped to the state, even if they have no operations or employees working there.
New York Governor David Paterson is widely expected to sign the measure.
The so-called “Amazon tax” closes a loophole for Internet retailers who derive sales through affiliate programs in which Web site owners place a link to the merchant on their site and earn a commission on sales made from referrals. In lobbying for the bill, the industry group representing New York retailers had argued that the exemption from the sales-tax collection requirement gave out-of-state online retailers an unfair competitive advantage.
First of all it is to be expected that there will be TONS of law suits over this and for people familiar with the NYS tax code (As a loyal tax payer with a brilliant accountant – I am). It is currently the citizens responsibility in NY state to report purchases made out of state on your taxes so that you can appropriately be taxed come April 15.
Thoughts?
A huge WTF indeed.
Move to Canada? I hear the taxes are much lower… ;)
So If I’m getting this right, your now being forced to pay taxes on such goods when you buy them and not when you do your tax returns(where some people may ‘forget’ to includes taxes for online purchases), just like in the rest of the world? Or is this an extra tax on an already existing tax?
I would assume that it would replace the existing “Usage Tax” that exists in NYS.
But it it unfair and in my opinion, illegal, to tax business who do not have a physical presence in the state they are shipping to.
It is very reminiscent of a commuter tax that Mayor Giuliani levied on employees who commuted into NYC from any town for their usage of NYC services. That law was struck down as illegal.
I feel a similar fate for this law – but on the federal level.
But it doesn’t seem as if their taxing the business as such, but receiving the consumers tax through the retailer, just as it is in the rest of the world.
Seriously, they already have a sales tax of 8% on average (and 9.5% in some cities) (which I also believe is also on necessities, but I can’t figure out if it actually is), and they tax damn near everything else. My household purchases a lot of computer parts annually, as well as furniture, and video games, and a lot more, because we live in such a small town, the closest city (and mall) is an hour away by highway, and I know there are worse off places than ours that need the internet purchases to get what they need, because buying online is cheaper then the cost of going to the store, purchasing it, then comping back and some families may depend on this to survive. This is just a way to get yet more money that the people don’t yet have. It makes me feel disgraced just to be going to college in Albany…..
Well Dave, if they drive in Canada like they do in New York State, then I’d rather deal with the tax. 8Þ
I agree with Hitsuji – that’s what it sounds like to me. They’re collecting taxes, rather than paying them. If you are expected to pay these taxes anyway (which I think you are saying you are expected to do) this is either something that will make life easier for people, or will piss them off because they can’t cheat on their taxes.
I could be misreading this though.
Also, if taxing commuters is illegal, maybe NYC should follow the London example and instate a congestion charge (although people do claim that it’s an illegal tax). As someone living in London, I think it’s great.
Dan,
I’ve been looking for an accountant, is he really good? If so can you pass his information to me via email, I am tired of accountants who don’t their sh*t
If it replaces the usage tax then you shouldn’t be upset, because you should already be paying that tax to the state.
@Brad.
I could imagine some small businesses refusing to ship to NY just to avaid this hastle.
It would put out a massive burden on businesses if this ends up running throughout the US. Would prob cost the consumer a small bit more, and would open up a new market in the US for online payment services that specifically managed state specific taxes. However creating a unifirm tax system throughout all states would definately ease such a burden.
Interstate commerce, anyone?
Well, the large problem here is that more than a few states that are supported by sales taxes are losing revenue to online sales of products. The only substantive difference between buying something at the physical store and buying it online, if the product ends up delivered to the same place, is that often one can avoid paying state sales taxes on online purchases.
Taxes should be collected where the business transaction is conducted – and in the case of online sales, that’s wherever the person using the computer to purchase the product is receiving the final goods.
I should indicate that I happen to work for The Man.
I would have said the biggest WTF ever but really we have this in the UK, have had for the past oh too many years!
What happens in the UK most goods and services (some are except e.g. cake, baby food), are taxed at 17.5%. So if I buy my DVD from Amazon or ASDA/Wallmart I still pay the 17.5% VAT. This is paid at the time of sale and not in any tax returns.
So really its no different to what’s been going on in the UK for many years. We just call it VAT.
Guess who will no longer sell to NY???
I’m one who has shopped via catalog and then, when it first became possible, the internet. I buy 99.5% of all my non-grocery items that way. MANY places charge me sales tax and that’s OK with me because it’s the law (not that I particularly LIKE it but it is what it is). If I do shop locally then I’m charged sales tax, so what’s the difference? And yes, I’m one who is just honest enough that I do pay the sales tax on items I’ve purchased online where the company doesn’t charge me upfront. So you really can’t scream about this. The online shopping world has gotten away with something for some time and now NY state, and others, are starting to put a stop to it. If you really hate this then get it in gear and do something about NY state and your county, and some town, sales tax laws! IMO you’re just pissing and moaning because you can no longer easily break the law.
I agree with ya Dan…I live in NY and am a student…I buy all my text books online cause they are way cheaper online. It seems very illegal as it’s crossing state lines and seems it would have to be a Federal case than state. We have so many freaking taxes at all like bedding taxes, sin taxes…etc…I tax NY
@RACinWNY: It’s not the problem of sales tax, so much as it’s that NY is charging an extra tax on top of whatever fees/taxes the online retailer may or may not be paying to their home state/country, if I’m reading it right. It’s one thing to charge extra for businesses within NY, it’s another to tax those who have customers who happen to live within the state.