New York Now Charging Sales Tax On Internet Purchases
They claim that the new tax “levels the playing field” for in-state retailers who complained that the lack of a tax on internet purchases put them at an unfair disadvantage.
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, they level the playing field by raising taxes? Why not just give the in-state retailers a tax break? Why is the solution always to raise taxes?
Second, how much of an advantage can internet retailers really have when all of their products must be shipped? Someone purchasing a book or DVD from Amazon instead of a local store is going to usually pay shipping fees greater than the sales tax. Or, if they choose some sort of free economy shipping, they still pay a price in terms of a delay between the purchase and when they get their product. So what is this tax really correcting?
The real advantage internet retailers have is that it allows people to shop from their homes. But why would New York lawmakers want to make it harder for New York citizens to enjoy that convenience?
This plan makes no sense.
