New York Wants To Tax Amazon.com Purchases

According to the New York Times, Governor Spitzer (of New York) is trying to pass a law that would force Amazon.com to collect sales tax for customers in NY:

To help fill New York State’s budget gap, Gov. Eliot Spitzer has revived a plan to impose sales tax on some goods purchased online that are not currently taxed, notably things bought from Amazon.com. The state estimates this will bring in $47 million a year.

Right now, of course, sales tax is a mess. Buy the latest John Grisham book at Barnes & Noble in Union Square in New York, and you’ll pay 8.375 percent sales tax. Buy it from Amazon and you won’t pay any tax. But order the same book from Barnes & Noble’s Web site, and you do pay the tax because any company with operations in the state must collect tax.

Actually, the buyer of the book from Amazon technically owes the tax to New York State, but Amazon isn’t required to collect it for them, according to a 1992 Supreme Court ruling.

The NYT article goes on to discuss the legal subtleties of trying to enforce this law should it pass.

Here’s our carefully considered opinion of Spitzer’s plan:

“Barf.”

Amazon Plays Dumb in Internet Sales Tax Debate [NYT]

Comments

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  1. Whitey Fisk says:

    Tell Mr. Spendy to cut costs instead of sticking it to consumers.

  2. llcooljabe says:

    nooooooooooooo!

  3. Rando says:

    Nothing new. NYers have to pay tax on video game subscriptions too.

    NY tax is crazy.

  4. fordpickup says:

    So this *just* pertains to goods purchased on Amazon? That doesn’t seem very fair.

  5. zentec says:

    The one of the original premises of this nation is the avoidance of taxes. Why should it surprise anyone in state government that people will go out of their way to avoid paying taxes?

    State governments should get used to cutting costs just like everyone else. Oregon, Delaware, Montana, New Hampshire and Alaska seem to find ways around the sales tax problem.

  6. doormat says:

    Huh? NY Doesn’t already have a state law that requires folks to pay state taxes on mail order/Internet items from out of state? I know NV does…

    I have to pay tax on all my Amazon shipments (and Dell), but thats because the businesses has a presence in my state.

  7. shadow735 says:

    only if Amazon is based in NY should this happen, I pay sales tax on purchased to a company if theya re located in calif

  8. snazz says:

    you cant single out one company and make them collect the taxes. either make apply to every out of state sale or nothing. maybe you should go after the people who are cheating on their NY tax returns by not declaring their out of state purchases. they are the real criminals here.

  9. nez77 says:

    I wonder if I’m the only person that actually pays USE TAX every year on my state tax return. I paid $40 this year.

  10. missdona says:

    @doormat: NY has a law that you are supposed to declare your internet purchases on your tax return.

    I guess that’s not workin’ out so well.

  11. meneye says:

    these government people are so stupid. Either that or they just don’t care, which is what I suspect.

    CUT GOVERNMENT AND YOU WON’T HAVE THIS DEFICIT PROBLEM! Idiots!

  12. forever_knight says:

    how about cut costs instead? yes, it will hurt.

  13. bohemian says:

    SD did some saber rattling about this. First they tried scaring the crap out of people by repeatedly announcing that they were going to crack down on individual people buying anything online and not paying taxes. Then they said they were going to make Amazon collect sales tax. The reality that it would never hold up in court to make one online retailer collect taxes and another not set in. Also the reality that there are millions of online retailers and they could never force them all to do their bidding. When it was mentioned that the entire state only has 750,000 people in it and we have fewer people than most cities it all kind of went away.

  14. Starsmore says:

    This’ll end up like those knife catalogues.

    “PRODUCT UNAVAILABLE IN CA, NY, MA, DC, etc etc etc”

    Watch, it’ll happen. Amazon’ll just stop selling to NY.

  15. SpdRacer says:

    Illinois just started trying to collect taxes on items purchased out of state, they are mainly want the cigarette monies, but the forms for figuring what you owe were sent out with this years tax forms. The onus is on the taxpayer to figure out what they purchased out of state and how much they owe the state for said purchases.
    Gotta love the governor!

  16. ConnertheCat says:

    I have no problem with them requiring people to pay the tax they should be paying anyhow. Kudos to the Government.

  17. cordeduroi says:

    never have I heard an official suggest SPENDING LESS. Policial jackasses anger up my skeleton like no other. Grr.

  18. Falconfire says:

    @zentec: This is actually a miss-truth that people ignorant of our history have handed down, as never ANYWHERE in any history of the Revolution was it about not paying taxes… EVER.

    It was about taxation without representation…. the fact that the colonies where forced to pay taxes without a official say in parliament.

    Never once did any of our forefathers EVER think the country could be ran without taxing people. One of the first things they did in fact was tax certain items to help pay back the cost of the war.

    While I would never disagree that spending should be cut, since that more than anything is the problem with our economy atm, the idea that we where a nation formed on the idea of avoiding taxes is a complete lie.

  19. StevieD says:

    The NY proposed law is on ANY vendor that sells more than $10,000 in goods to citizens of NY.

    Amazon is the ONLY company making noise at this time about the proposed law.

    NetFlix, per the NYT article, is in agreement with the law as NetFlix already collects appropriate sales and/or use taxes.

    Use taxes are already on the books for every state that has a state sales tax. The Texas Tax Commission has an excellant FAQ about sales and use taxes

    [www.window.state.tx.us]

    Compliance with the use tax payments is considered quite low across the board except:

    1) Certain groups of citizens, such as Mormans, who have a high voluntary payment history.

    2) Certain citizens that find paying the use tax or voluntarily paying the out-of-state sales taxes useful as an itemized deduction on their personal income tax returns.

    3) And high profile politicians and lawyers that have much at risk should they be caught not voluntarily paying the use taxes or out-of-state sales taxes.

  20. StevieD says:

    @SpdRacer:

    Thank you Illinois.

  21. Geekybiker says:

    This has already been tried in the courts. It will eventually be found unconstitutional. You can’t make an out of state entity collect your taxes for you.

  22. UpsetPanda says:

    Honestly, I’ve never thought of it being tax-free with Amazon. I use it out of convenience or better deals, not because they don’t charge tax. Though VA sales tax is nowhere like NY’s tax. It’s because of California’s high tax that when I vacation there I’m not going to buy any gifts there that I couldn’t just get somewhere else, whether it’s internet or my own state, as long as it didn’t take a ton of effort.

  23. StevieD says:

    @nez77:

    My voluntarily use tax payment (prelim) should be about $12. Why so low? Because I buy local whenever possible or buy from vendors that collect sales taxes.

  24. temporaryscars says:

    As if we weren’t getting taxed enough. And where is this tax money going? I can’t see it.

  25. @nez77: Pretty much. :)

    @SpdRacer: Illinois does this every few years, complete with SCARY LETTERS sent to your home about how if you don’t pay your USE TAX, the scary Illinois Revenooers are gonna come gitya.

    When I was in college, Illinois had a budget shortfall and went all batshit about the Use Tax for a while, to the point that they wanted college students out of state to determine whether clothes and textbooks they bought at school would get more use IN or OUT of state, and pay the tax accordingly. As if anybody could be bothered.

    They’ll get bored of it again before too long, and move back to Illinois’s other perennial tax issue, disputing income tax trades with Wisconsin and Indiana (for people who live in one state and work in another so pay tax to the work state through automatic deduction but owe it to the home state … sometimes they agree to super-elaborate formulas that figure it out so taxpayers don’t have to do anything; other times they fight, cancel the agreements, and you get to file three extra tax forms if you work across the border.)

    Illinois will only really go after you for use tax on things like boats and cars bought out of state, typically in IN or WI with the express purpose of cheating the sales tax.

  26. castlecraver says:

    @Falconfire: Every now and then, somebody posts something that actually makes me to do a double-take in disbelief that there’s someone else out there on the ‘net who didn’t drink the government or economics kool-aid flavor of the day. Your comment is the latest rare example. Thanks and cheers.

  27. ConnertheCat says:

    Aren’t car taxes paid when you register the vehicle? You shouldn’t pay tax to a dealer if you buy out of state (unless you want to pay tax twice!).

  28. Geekybiker says:

    You have to pay use tax to register your car in illinois, so its pretty had to avoid that tax.

  29. StevieD says:

    @Geekybiker:

    Actually many states can and do require sales taxes charged on purchases by public funded schools, colleges and universities whether those purchases are made in-state or out-of-state.

    If the vendor refuses to collect the appropriate sales taxes, the institution has instructions to cease doing business with the vendor.

  30. sled_dog says:

    I live in Wahington State and Amazon collects sales tax on my purchases.

    Sales tax is just that … tax on things you buy.

    By buying out-of-state and not paying sales tax, you are cheating your state out of income it has budgeted for and should legally have.

    What makes those of you objecting to this think you are so special? Just askin! And please phrase you answers “I don’t have to pay taxes because…….”

  31. StevieD says:

    @ConnertheCat:

    The “I am taking the car out-of-state” is one of the oldest tax dodges around.

    Some states compel sales taxes to be collected at the time of sale REGARDLESS of who is buying the car.

    But because state laws vary, and some people will buy in one state and then drive the car into another state for registration, some states will tax any new vehicle at the time it is registered if the vehicle was not previously tagged in another state.

    There are states that tax any car the first time it is registered in the state if the car was not purchased (and sales taxes paid) in that state. Usually those taxes are used to offset low tag rates.

  32. StevieD says:

    @sled_dog:

    Amazon has a physical nexus in Washington State. Hence the automatic collection of Washington State sales taxes. To the best of my knowledge Washington State is the only state that Amazon collects sales taxes.

    Sales Taxes are considered a windfall tax by most states as, unlike property taxes, the state can not accurately project collections.

    Some states may pre-allocate a portion of the Sales Taxes, assuming that the taxes collected would not drop by more than a specific % for the upcomming year. But when sales tax collections do not meet expectations those states will be up the proverbial creek.

  33. StevieD says:

    @Falconfire:

    Right On !

  34. my ass is jumping the border to CT should this take place.

  35. wallspray says:

    The only people put off by this law are people who dodge the law to begin with. You are supposed to pay the sales tax to your state govt. either way, it is just not charged by amazon. People don’t and it is a burden on the state to attempt to force people to claim items they purchased online. NYS is taking the correct step towards receiving the required taxes from people whom would otherwise not pay them. Am I affected by this? No. Would I be disappointed if it did affect me? Of course, but all this is, is just the govt. catching up with technology. We can buy EVERYTHING online now, why should we not be taxed for them?

  36. i love living in Oregon, no sales tax, beautiful nature and when you pull up to the gas station, there someone there to pump your gas for you.

  37. mtaylor924 says:

    My question is…why isn’t sales tax paid to the state where the online vendor does business? If I went to California and shopped at the “Amazon Store” in person (imagine the size of that one!), I would definitely pay CA sales tax. That said, if their servers are in CA, I should still be paying CA sales tax and not my home state. Reason being that the point of sale is at their server where my payment information is collected and the transaction is recorded.

    In the case that a corporation does business in multiple states, you would either pay your own state’s tax if they do business in your state, otherwise you’d pay based on the state where their home base is – probably where they are headquartered.

    The fact that it’s “internet shopping” shouldn’t matter – it’s essentially the same as shopping in person and arranging for the store to ship the item back home for you, just as you might actually do when on vacation or such.

    This would eliminate the “use tax” issue that NY is facing, as states can’t (shouldn’t?) require you to pay sales tax twice on the same item.

  38. LTS! says:

    Everyone should really learn about how taxation works. You are legally required to pay the tax on ANY item, you purchase ANYWHERE, if you bring it back into the state you reside in.

    This is NOT just a NY law. The reason NY gets attention is because a few years back they placed the line item on their state income tax forms. Most states still don’t but that does not mean you are NOT required to pay the tax.

    When you purchase from an Internet retailer, they are not required to COLLECT sales tax. You, as the purchaser, are REQUIRED to pay a USE tax on the item equivalent to the taxation rate of your area.

    This is not up for debate, it’s the law. Whether people or do it or not is an entirely different debate. Kind of like the speed limit.

    In this case Spitzer is claiming that because Amazon uses affiliates inside the state of NY they are operating a business presence within the state and are therefore required to collect sales tax.

    It’s amazing how LITTLE people will do to understand a situation.

  39. StevieD says:

    @Petrarch1603:

    What pays for your free lunch?

    Higher income taxes?

    Higher property taxes?

    Higher car tags?

    Oregon is “nice” to give you no sales taxes. Where do they make up the $?

  40. matto says:

    A vote for Ron Paul is a vote for a tax-free Amazon

  41. Geekybiker says:

    @StevieD:
    Oregon makes it up in property tax mainly.

    And @ the state funded schools, etc. They are free to compel institutions inside their state to pay taxes however they want. That includes only dealing with people who will collect sales tax. However they still can’t compel someone outside the jurisdiction to collect tax. IE if state U wants to buy from amazon, and amazon says “no, we won’t collect tax” State U is out of luck. In theory they could write a law compelling residents only to deal with places that will collect tax as well. Enforcing such a law would probably be impossible. (much like collecting the use tax already due.)

  42. videohordr says:

    New Yorkers have one of the highest tax burdens in the country and to see this coming from Albany really pisses me off.

  43. SuperJdynamite says:

    @nez77: I paid my use tax one year and they just refunded it.

  44. chiieddy says:

    In MA, you can chose to do one of the following on your income tax:

    Attempt to figure out all your tax free (i.e. bought in NH) or online purchases for the year and multiple by .05 (5% sales tax)

    OR

    Use your AGI and take the default value and claim that as your safehouse sales tax for the year.

    I usually take #2. The one or two times I’ve actually tried to figure out #1, #2 was less anyhow.

    MA has ALWAYS required the taxpayer to claim sales tax. Also, if you pay more than 5% while visiting another state, you can claim the difference as a credit, so it goes both ways.

    Fear the audit if they catch you not taking the safety and they can prove you’ve made ONE Internet purchase (not difficult).

  45. mike says:

    Virginia actually charges a sales tax on anything you didn’t buy within the state. It’s called a “common use tax”. It was enacted in 1966 (yes, really) and it’s spilled over to online purchases.

    So you have to keep track of all your purchases, fill out a form, and pay the tax, on top of your state taxes…

  46. ironchef says:

    This is SO STUPID.

    Plus isn’t this interference with interstate commerce?

  47. Doug Nelson says:

    I think this is an excellent idea. If you must tax (and we must), there is no fairer tax than sales tax, and internet companies are uniquely positioned to easily track and report sales by state. It would also be a boon to some local businesses that can’t compete due to the additional cost of shopping locally due to sales tax.

  48. arcticJKL says:

    It is illegal (a violation of the US Constitution) for States to tax purchases made in another state or commerce crossing state lines.

    Clearly if a company selling on Amazon is based out of New York and Amazon is based out of New York, New York can not tax the sale.

    Too many companies are voluntarily paying a ‘tax’ to the states right now. This needs to be stopped.

    Here is Ca they have a ‘use tax’ where you are supposed to report all purchases make out of state so they can tax you on them. So if you move here from Arizona you have to pay a tax on all your possessions.
    Totally illegal and no one pays it.

  49. AnnC says:

    @nez77: Yes

  50. AnnC says:

    @arcticJKL: Actually, it’s perfectly legal to tax purchase made out of state. The only problem is that states can not force out of state businesses to collect the tax on the state’s behalf.

  51. DeltaPurser says:

    Absolutely rediculous… And how much will they spend on enforcing this?!

    We’ve got a debate right now here in Florida: property taxes are going to go down, so to compensate for that, they are contemplating raising the sales tax. What the FUCK?!?!?!?!??! So why even bother lowering the property taxes to begin with? And now people who don’t even own homes will have to chip in even more…

    A bunch of morons, that’s who’s running this country.

  52. mtaylor924 says:

    @arcticJKL: The “use tax” is not illegal. States can tax anything they wish, within their borders – in this case they tax the use of all newly purchased items, with the caveat that items purchased in-state are exempt from “use tax” because you have already paid sales tax.

  53. tande04 says:

    @LTS!: You beat me to it.

    The purchaser is always the one that pays the sales tax. The purchaser is always the one responsible for the sales tax.
    There is no difference between not paying the sales tax on something you purchase from Amazon, eBay, etc. and walking out of a Wal-Mart without paying the sales tax on your purchase. The only difference is that the physical store gives Wal-Mart “nexus” which requires them to obtain a sales tax license then collect and remit the tax. That and the fact that many people believe erroniously that their internet purchases are some how “tax free”.

    Don’t be surprised to see this go through. There are numerious reasons why the old case law supporting this is outdated. In the past it was catalog sales and the argument was that they couldn’t possibly keep everything straight which was a good argument before the net and computers. Now numerious programs are able to do this without any problem. The simpliest argument would be that if Target and Wal-mart can do it so can Amazon. Beyond even that you’re seeing a major push in the streamlined sales tax movement which seekes to simplify some of this and currently allows .coms to vouluntarly charge and remit the tax.

    One interesting note, the company that brought the orginal suit saying that they had no nexus and couldn’t keep it all straight, Quill, now charges tax. Though that is because they got bought out by Office Depot and have nexus in almost every state.

    @ironchef: Nope, the freight is still exempt. Thats the only part which would be “interstate commerce”. The rest is just simple purchase of tangible personal property.

  54. Bridgette says:

    This is the same guy that also proposed imposing a new tax on little cigars, illegal drugs, and get this….lap dances!

  55. ZzFDKzZ says:

    Ah damn I hope not. I do all my online shopping through Amazon.

  56. tande04 says:

    @arcticJKL: I guarantee you that every single major corporation in California accrues tax on out of state purchases they make.

    No individual in Cali might pay the “use tax” but frankly there probably aren’t many individuals that would make it worth the state’s time and money to audit. The major buisniess on the other hand know it is a legally imposed tax and they would be not only facing the tax but the interest and pentatly on it.

  57. reznicek111 says:

    Ah, glad not to live in NY any more… ;) but IL is surely not far behind. :|

  58. Coles_Law says:

    For what it’s worth,Kansas state tax has a standard use tax you have to apply, unless you can prove you should pay less. It’s not much, but it’s there.

  59. caj11 says:

    I’ve practiced state & local tax law, both as an attorney and an accountant. NY doesn’t have a prayer here if Amazon has no physical presence or employees in the state (salespeople don’t count either). Unless there is an amendment to the U.S. Constitution, this can’t happen. Only California could come up with something more ridiculous than this – they tried to tax an out-of-state company whose employees occasionally made phone calls into the state, saying the person’s voice on the phone constituted physical presence. Not surprisingly, the court didn’t buy it.

  60. justbychance says:

    Gotta love New Yawk. Stuff like this is why I’m glad I packed up and moved a couple hundred miles away.

    Property taxes, crazy rent, MTA strikes and now this.

  61. StevieD says:

    @tande04:

    Freight is not exempt. At last count approximately 40 states actually tax freight charges.

  62. Hoss says:

    I assume the Governor and his family has already reviewed their purchase history to ensure there was never an internet transaction that they did not pay NY taxes? Clearly NY state is not the hub of internet commerce nor will it be with such a focus

  63. Superborty says:

    @ConnertheCat: Tool

  64. Superborty says:

    @nez77: Pathetic

  65. Superborty says:

    @Doug Nelson: Hip Hip Hooray. Let’s have more taxes. Let’s raise taxes to 100% on the “rich” (those earning over 10k a year).

  66. Superborty says:

    @wallspray: Maybe if we didn’t already have such obscene tax rates, then people would feel a duty to pay taxes on internet purchases. Quite frankly don’t have the time and don’t think the government deserves another penny of my money. Maybe you enjoy working until July for Washington and your state bureaucrats every year. I don’t.

  67. Buran says:

    @Falconfire: We still allow it to happen. I’m amused by the “Taxation Without Representation” DC license plates … but the problem STILL has not been fixed. Unbelievable that this nation was founded partially on the basis that we should have a say in our taxation … and then allow it to go on.

  68. tande says:

    @StevieD: Huh, well that does show where sales tax can be confusing.

    All of the states around here consider seperatly stated shipping charges not to be part of the taxable total of the sale.

    @caj11: Why would there need to be an amendment? There is nothing in the constition that defines the nexus needed for a state to require a vendor to collect and remit sales tax. The supreme court set up a four prong test in Quill to keep it from interfering with interstate commerce but its not like a court decision has never been reversed.

  69. StevieD says:

    @tande:

    Yep, them sales tax laws are confusing. That is why the Multi State Tax Commission [www.mtc.gov] is so important.

  70. savdavid says:

    How can they force Amazon to do that when the Supreme Court said they didn’t have to?

  71. camille_javal says:

    @Superborty: Maybe if we didn’t already have such obscene tax rates

    Compared to whom?

  72. sled_dog says:

    @StevieD:
    So just because I happen to live in the “nexus state” I have to pay taxes and you don’t? Washington state gets its rightful income and your state does not?

    Of course each state knows how much they are going to collect in sales tax each year. Spending patterns are regular and predictable. If they weren’t, they simply would not be used as a source or regular revenue.

  73. Superborty says:

    @camille_javal: Sadly, compared to almost any other semi-modern country in the world. Look it up.

  74. Superborty says:

    @Buran: I have no love for Washington DC and their plates. I think they are an embarassment. The founding fathers made sure that D.C. was not located in a state and would not have separate representation.

  75. StevieD says:

    @sled_dog:

    Yes, just because you live in Wash State you get to pay sales taxes on your Amazon purchases.

    How unfair.

    Sarcasm aside, this is one of the very issues that must be resolved. NY State is taking the first step.

  76. StevieD says:

    From Cornell Law.

    The Quill Decision.

    An interest tidbit in the conclusion of the US Supreme Court Opinion.

    I have removed some of the linked references for ease of reading.

    “This aspect of our decision is made easier by the fact that the underlying issue is not only one that Congress may be better qualified to resolve, but also one that Congress has the ultimate power to resolve. No matter how we evaluate the burdens that use taxes impose on interstate commerce, Congress remains free to disagree with our conclusions
    Indeed, in recent years Congress has considered legislation that would “overrule” the Bellas Hess rule. Its decision not to take action in this direction may, of course, have been dictated by respect for our holding in Bellas Hess that the Due Process Clause prohibits States from imposing such taxes, but today we have put that problem to rest. Accordingly, Congress is now free to decide whether, when, and to what extent the States may burden interstate mail order concerns with a duty to collect use taxes.”

    The key part ……

    “Congress is now free to decide whether, when, and to what extent the States may burden interstate mail order concerns with a duty to collect use taxes”

    The states are whining. Groups of states are tying to act in concert with each other. Congress has played around the edges of this issue in the past but nothing has happened.

    But with the change that is about to take place in Washington DC, it is only time that Congress sets to correct this problem.

    I give the issue two years. Tops.

  77. humphrmi says:

    Is there anything that NY does not tax? I mean, criminey, a previous employer of mine at one time offered me TWICE MY SALARY to move from Chicago to NY, just to cover the taxes.

    I guess you guys have great social services or health care or something.

  78. castlecraver says:

    @Superborty: A valid point, because the founding fathers were divinely-guided, flawless superhuman geniuses. Nothing they ever came up with has needed or will need to be amended in any way.

  79. bluewyvern says:

    @sled_dog: No. We ALL have to pay tax on our Amazon purchases. (At least, we do if there’s a use tax in our state, and there is one in New York. From the preceding discussion I’m a little unclear — does everyone else have a use tax, too, or just New York and some others?) Since you live in Washington state, Amazon collects the tax for you and saves you the trouble of reporting it yourself. We in New York have the option of either 1) digging up receipts and reporting it on our tax return, or 2) evading the tax. But we still all “have to” pay it.

    This proposal isn’t changing in any way the amount of tax New Yorkers owe. It’s just making it easier to collect, for those who are inclined to pay it, and harder to evade, for those who aren’t.

  80. StevieD says:

    @bluewyvern:

    Every state (to the best of my knowledge) which has a sales tax also has a use tax.

    There are several classes of use taxes. These taxes are applied to specific produts and are usually hidden from the average consumer. For example, you may not pay “sales tax” on a newspaper purchased from a store or news stand. The vendor may not pay a sales tax either. Surprise, surprise, the printer of the newspaper pays a use tax on the weight of the paper purchased or the number of pages printed OR the supplier of the raw paper pays a use tax on the weight of the paper. One way or another the state will have collected a tax.

  81. endersshadow says:

    And Mr. Spitzer wonders why the young population of New York is fleeing like the plague just hit. Count me as one born-and-raised Central New Yorker who fled for the greener (as in money) pastures of a state with much lower taxes and a lower cost of living.

  82. Canoehead says:

    Well, NY has lots of potholes that are bigger than my SUV. I guess if this passes I’ll stop ordering stuff to the office and order it to home in NJ instead.

    I don’t think that Spitzer can do this on his own – but if a Dem wins the White House and they keep Congress(lookin’s pretty likely) then a bunch of Dem governors will go whining to Congress and something will likely pass.

  83. arcticJKL says:

    Just to clarify the use tax, based on the form mailed to all taxpayers, was on all products purchased out of state old or new. And the tax was equal to the sales tax you would have paid.

    And no, States can not tax sales that occur in another state that is the purview of the federal government.

  84. StevieD says:

    @Canoehead:

    Democrate in the WH, control of Congress, and most state governors.

    Two Years. Tops.

    The Governors are already lining up with their begging lists in hand.

  85. nrwfos says:

    @ConnertheCat: “should be paying”. The USA started by people not wanting to pay taxes. Just because governments have gotten too large doesn’t mean we should want to pay taxes. I don’t want to pay any more or in fact the taxes that I am “supposed” to pay. If we don’t try to fight off taxes the demand will grow larger and faster than we can believe it.

    Right now all governments are trying to figure a viable way to get a piece of the sales tax “action” that internet sales could provide. They are certainly circling around it all the time trying to get a handle on things. I’m getting really tired of increasing taxes. Boston Tea Party may be the political party I join.

  86. nrwfos says:

    @Falconfire:

    One could argue that we still have no representation. I don’t feel represented. I feel that lobbyists are represented. And furthermore I don’t think people should ever think they should pay taxes because they should…that way leads to unending, baseless taxation at extreme rates. And we almost have that. Just because the state “says so” doesn’t mean it’s right. Taxes never go away…they just get more onerous and numerous. We have a duty to see that our governments are reasonable and not tyrannical especially when it comes to taxation. It is very much like anything that is allowed to become rampant. You can never get rid of it…short of revolution.

  87. nrwfos says:

    I have never considered paying no sales tax as a reason to buy from Amazon. I only buy from them because it’s convenient, they have a large inventory of diverse goods, and the fact that I am unable to go to B&M stores locally as well as unable to get goods into my house once I am home. I know that some people gleefully love the fact that they don’t have to pay sales tax and add that to their savings. I realize that it’s about 8% saved by most people if they don’t pay it with their income tax. some states don’t have income tax – how do they pay it? The problem I have is that I already pay Federal income tax and state income tax as well as all the other property and vehicle taxes. I fear the day when the feds as well as the state gets into taxing the internet – on any basis. I wish the internet (service – not necessarily the internet sales) could be exempt on the basis of free speech – but the taxes on phone service, etc., already precludes that.

  88. nrwfos says:

    @Bridgette: If they made those things legal they could tax the hell out of them. But then back during “prohibition” mobsters usually got put in jail because of unpaid taxes on unreported income from illegal liquor. Making it legal makes it so much easier to track and collect. Sin taxes are always “justifiable” to some people.

  89. Chigaimasmaro says:

    This is an interesting proposal. More internet services are coming under taxation. For a person that pays federal, city, state and sales taxes and only receiving a partial refund of the federal taxes back, it makes me wonder: Just how much of these “taxes” are going to fund actual things that benefit society and not just filling the coffers of politicians and businessmen?

  90. cooler_dood says:

    i hope this doesn’t happen. first NY, then the world!! :(

  91. ARPRINCE says:

    Glad I don’t reside in NY!

  92. zibby says:

    Another BRILLIANT policy proposal by America’s favorite mildly retarded politician! Uh oh, I hope Governor St3amr0ller doesn’t read that or he’ll pressure me into a settlement and then have a big news conference or at least call me up and cuss me out.

    I never thought I’d look back fondly on Pataki.

  93. utensil42 says:

    RE: Oregon
    Not only does Oregon have much higher than average property tax, but they also have the shortest school year in the nation because they cannot afford to keep the school running for a standard school year.

  94. aka Cat says:

    @nez77: Not every state has income taxes. No state income tax, no state filing to include a use tax on.

    NC has a line item for internet sales tax; I always take the ‘estimate based on income’ both because I don’t save internet receipts, and because the estimate is probably less than I would actually owe.

  95. statnut says:

    @humphrmi: Pfft Hahaha! Yeah right!

  96. Starfury says:

    I just did my Calif. taxes and there is a spot to pay “use tax” for items mail ordered from out of state. Considering that 99.5% of my purchases are made in state and I pay the 8.75% sales tax on those items they can eat it for the few things I do mail order.

  97. Jaysyn was banned for: http://consumerist.com/5032912/the-subprime-meltdown-will-be-nothing-compared-to-the-prime-meltdown#c7042646 says:

    @nrwfos:

    You need to take a remedial American History class.

    The Boston Tea Party was due to Taxation Without Representaion, not just because taxes were being levied.

  98. Geekybiker says:

    @CatMoran: That’s laughable. Just this year Oregon issued a large tax rebate to its citizens because there was a large budget surplus. Not to mention Oregon schools to well above national averages on standardized testing.

  99. radio1 says:

    This is silly.

    LTS! is entirely correct, it upon the onus for the purchaser to pay for sales/use tax from every purchase.

    But this is truly besides the point. The revenue shortfalls are in the present, and whenever a state government mismanages they try to bleed more out individual taxpayers and not corporate entities.

    If states like NY were truly with it, they would have recognized this revenue opportunity and set some type of audit tax laws up in 1996, when it would be easy for the state to recognize an out of state internet purchase and make sure a taxpayer had paid that. But no, they didn’t.

    Instead of being pro-active, states have this languid attitude until trouble comes down the road. Then they’re well, ‘that internet business is doing well let’s get out 30 pieces of silver’ from the taxpayers. It’s disingenuous to the spirit of e-commerce, when most people shopped online because there was NO sales tax involved and that usually could off-set shipping expenses.

    As it is in states like MA and NY, you can claim all you want in use taxes that you supposedly paid. But guess you are going to need receipts if you have curiously large sales tax credit on your state return.

    Most likely if there were stricter enforcement rules, you would not be able to claim the really big expenses you pay for. If you live in a tax-free state (or even if you don’t) and try to file a state credit (based on income) of actual sales tax paid or imputed (tax-free states) vs. actual state income taxes paid on your federal Sch A. State income paid usually win out vs actual state sales paid or imputed sales tax. Even if you live in tax free state and can claim that imputed amount, it’s far less than that plus the gain you might claim with your already increased property taxes, if you own a home.

    It’s a shell designed to extract the most amount of money. Any item purchased over what? $2500 is not allowed, cars are disallowed, boats– luxury purchases are disallowed on the federal side. So these credits that you might get on state or federal for actually paying and reporting sales taxes are a lot less than what you would actually paid anyway.

    On-line businesses should fight this tooth and nail. The only way this would be okay in my eyes, is if you got to claim your shipping fees as a state deduction (or at least 50% of them). That would be ‘fair’.

  100. Superborty says:

    @castlecraver: Yes, we should all be so ashamed of the founding fathers…. They really didn’t accomplish a whole lot of note or seem to have much wisdom ahead of their times….

  101. S-the-K says:

    I guess Gov. Spitzer hasn’t read any Adam Smith, Milton Freidman, et al. Free trade is our salvation.

    When you buy your John Grisham book on Amazon .com, you will have to pay shipping. If you spend enough, Amazon.com will pay the shipping. That cost of shipping pays for the shipping company to hire people to deliver your package to you. Amazon.com pays taxes. The shipping company pays taxes. The employees of both pay taxes. The cost of the book includes the cost of taxes of making the book. Taxes are being paid left and right.

    Let’s say the customer pays $25 for the book to get free shipping. If they don’t have that option and are faced with $25 + ~9% tax, they might decide that it costs too much and wait for paperback or get it used or at the library. All of which costs Amazon.com and the shipping company income. If enough people make that decision, Amazon.com and the shipping company may decide to lay off workers to make up for reduced income and less work available. That makes less taxes paid and fewer taxpayers.

    Bah! Tax the rich (read: people who can read and afford to buy books)! They’ll be glad to work for free so that lazy illiterate people can stay home and watch Oprah. :-)