One of the budget-related changes voted in last week by New York State’s politicians included a new “Amazon tax”:
“Another $50 million will come from requiring online retailers like Amazon that do not have a physical presence in New York to collect sales taxes on purchases made by New Yorkers and remit them to the state.
New York’s argument, based on a reading of the 1992 Quill vs. North Dakota U.S. Supreme Court ruling, is that because Amazon makes sales through affiliates who live in the state, it can be considered to have a physical presence there—which means the new law wouldn’t apply to retailers who don’t use affiliate programs.
Oddly, until now New York residents have been asked to voluntarily provide their total sum of online purchases on their state tax forms in order to estimate a tax payment, but InternetNews wrly notes it “evidently has fallen short” of the expected revenue goals set by the state.
Although there’s likely to be a legal challenge to the law, it’s also possible that other states will use it as a model to levy their own sales taxes whenever there’s an affiliate presence in-state. In the near future, at least, it looks like New Yorkers will soon have to start paying sales tax on Amazon purchases.
“Legislators Back Spending Rise in State’s Budget” [New York Times] (Thanks to Andres!)
“‘Amazon Tax’ Lands in New York” [InternetNews]