[bits.blogs.nytimes.com]

Isn't this ILLEGAL?! I thought web site purchases are TAX EXEMPT? I understand the "argument" of some of the "stores" having a "physical" location - but what about the Amazon sellers that don't? I mean, seriously - this is FUCKED up. Glad I don't live in NY, that's all I'm saying.

@TheManator: Uh no, why would online purchases be tax exempt? However, this is likely illegal since Amazon does not have any physical locations in the state of NY. I can be that Amazon will take this to court.

@ecwis: bet*

@TheManator:

Actually, anything you don't report as "use tax" is something on which you are illegally not paying state tax.

People don't report use tax because they assume that it never gets reported to the state or that the state would not come after them, and indeed, nobody does.

However, if most people count up online purchases over the year: say, a few CDs, a few clothing articles, some DVD box sets, Christmas presents, maybe a few video games and even a gaming console or a new digital camera, not even talking about a computer or stuff like that, it adds up to at least a grand. On average, each state would make about 60-70$ if you reported it, and aggregated over the population it's a lot.

@TheManator: Sales tax is required for online purchases if the retailer has a physical presence in your state. I already pay tax on amazon.com items because I'm in WA.

I love how the Consumerist always has cat images whenever there is a story on taxes.

Does this apply only to purchases FROM Amazon, or purchases from other sellers VIA Amazon? Because if I'm selling shit on Amazon, I sure the hell don't have any affiliates in NY.

LOL Good luck new york

@uricmu: Hrumph, the 'use tax' always gets me. If it is a use tax, how come I don't have to pay it on items I use and bought in the the same state (coincidentally paying sales tax on it)? And how come the use tax rate just conveniently happens to be the same as the state general sales tax rate? Yeah use tax is just a fancy sales tax so that if you live near another state you can't take advantage of tax rate differences.

BTW, in my last home the village and zip code I was in was in three different counties each with a different sakes tax. Also each with different sales taxes on different items like groceries and clothing. Yeah this is going to be really easy to pull off for amazon.

If only NY government could be as creative in finding ways to control their bloated budgets! Easier to put their hands out again, I suppose. Does anyone doubt that this new revenue stream will be wasted?

What tax bracket is that cat in? He seems very alarmed.

Most state tax auditors have a personal office at your local jewelry store. States love chasing use tax violators. It is easy money and often well worth the effort as the use tax on a highend jewelry can easily top 1,000's or even 10,000's of $.

Is the tax only for Amazon.com, or is it just of everything you buy online.

Huh, I thought Amazon already did charge sales tax in NY for some reason.

The "Use Tax" if ludicrous as it's completely unenforceable. It's supposed to apply to purchases on Indian Reservations as well.

The law (as stated by the Supreme Court in Quill, as noted in the post) says that, if a company has a physical presence in your state, they have to collect your state's sales tax from sales to people in your state.

If the company's doesn't have a physical presence, it doesn't have to collect the tax, but you still owe it - you're just responsible for writing the state a check, rather than having the store pay the tax on your behalf. Needless to say, the number of people who actually write this check is, uh, limited, hence the state's desire to force more online retailers to collect the tax.

Oregon is the best state ever. No sales tax, and any politicians who float a sales tax basically commit political suicide.

What happens if I buy an item in another state, pay sales tax on it at the point of purchase, then take the item back to my homes state and use it there? Am I supposed to pay sales tax on it again in my home state?

@TheManator: I don't live in NY, and I'm very concerned. Other states often follow NY's lead. Remember when you could smoke in bars?

I hope CA doesn't do this anytime soon. Only reason I buy things from Amazon is because of no tax and free 2 day shipping w/ Amazon Prime.

First, killing the congestion pricing, and now this.

NYC seriously needs to secede from Albany.

@youbastid: Still can in Michigan. (But I don't think the state has enough money to buy a pen to write the bill anyway.)

@magic8ball: Well, no. You pay the tax where you make your purchase. Otherwise, wouldn't that amount to an interstate (and unconstitutional) tariff?

Going off topic, if you go to Canada and bring shit back, then you may have to pay a duty for importing goods BUT you can get your Canadian sales tax refunded.

If this is a tax on items that come from Amazon affiliates with NY physical presence, it makes sense. If it taxes the entirety of Amazon purchases, it's just another attempt at taxation that the internet as a general whole has fought against to retain commercial viability in a number of goods and services.

Meh. For everyone that complains about federal taxes, the states and local municipalities are far worse.

@youbastid: FWIW, California had the smoking ban four years before NY did.

@magic8ball: Actually, I think you are supposed to pay a use tax in your home state most of the time. BUT, you also can likely get a tax credit for the tax you paid at the point of purchase, so you're not really paying the same tax twice. Just the higher of the two taxes. This isn't a universal rule, though, so some people might technically owe a sales tax twice.

Massachusetts actually has "safe harbor" voluntary payment option. You pay a standard amount determined by your income and the state clears you completely for that year. I think its a little high, myself, creating too little incentive for casual internet buyers to step up and pay. I think I get a lot online, but even for me, its borderline beneficial to pay the safe harbor tax. Nevertheless, one wonders if a well executed "safe harbor" law might be more financially beneficial to New York then trying to take Amazon to court to force them to collect New York State taxes.

If Amazon just opened up a new warehouse in NY then this tax makes sense, if they didn't then.. I don't like where this is going..

@magic8ball & BStu

BStu is right as far as most states are concerned. If you buy something in a state with a lower sales tax, your state will (in most cases) "require" that you pay the difference.

For example, if you buy something in Massachusetts at 5% State Sales Tax, and then return to your home state of Rhode Island, where the State Sales Tax is 7%, you owe the difference of 2% to Rhode Island.

I know this because I live in Rhode Island. The state is actually quite clever in collecting, too... My dad bought a car in MA from a private citizen and when he registered it in RI, not only did he have to pay all 7% of the Sales Tax in order to register it, he had to pay 7% of the used dealer Kelly Blue Book sales price - a good $2400 higher than the actual sale price!

PS: I hate sales & use tax.

Dear amazon,
We are not able to enforce our laws, can you please do it for us?

Thanks,
New York.

@BStu: I want credits from California for the things I bought in Oklahoma last year. Or for that matter, for the things I bought in Europe two years ago.

If you believe regular sales tax is justified but get upset at having to pay sales tax on an item purchased via the Internet, you are a stupid hypocrite.

Kitty be freaken because Amazon.com sells mouse vittles.

OH MAN CATS ARE SO FUNNY I'M GLAD THEY'RE IN THIS PICTURE!

@Katorok: Amazon opened one in Munster, IN. If this means Indiana can make them pay sales tax, that would be a joke. It's not a store, it's a warehouse for storing things to achieve quicker shipping. Why not charge a sales tax for every state a 18 wheeler passes through? Tax needs to be levied on the point of sale. Adding any more complication than that is just going to cause problems.

Oh great, way to be a trend setter NY. I hope the politicians in the other states (*cough* california) are smarter and listen to the people and leave the matter as is.

CA already has a 'use tax'
These taxes are illegal because one state can not tax sales in another nor can it tax property for crossing state lines.

@pecheckler: agreed, hate paying it, don't want to pay it, but its inevitable. there is no reason why the internet purchases need to remain tax free. the justification of needing to help assure success of internet commerce no longer exists.

@arcticJKL: states can't tax alcohol, cigs and gas that cross state lines? yea, right.

My main incentive for buying stuff online isn't to avoid sales taxes, but to avoid having to get up off my butt to shop.

Shipping costs pretty much eat up any savings made by not paying sales tax

Also, I'd estimate that about 2/3 of my online purchases tacked on the sales tax anyways!

So now I'm basicly guranteed to get double popped.

Add in that it takes at least 5 days to receive anything. And unless you're really brave, you can't buy stuff that you really should be there at the point of purchase to try out (clothes, shoes, instruments, etc.)

The slight, online shopping edge is really diminished now that taxes are guranteed to be paid.

New York is a dying state, and hooker-loving-governors are the least of our worries.

Maybe I'm wrong, but why are people making a big deal out of this?

Amazon will laugh and say "no, we're not implementing this, see you in court," and it'll drag out for years and years.

@youbastid: Your state already likely requires you to declare your untaxed purchases on your income tax form (unless your state doesn't charge sales tax ala New Hampshire). In MA, you can try to remember what your bought or pick the safe harbor figure at .005 * your AGI.

@mikelotus: I wouldn't be so sure. Unless all sites eat the shipping, you are paying that extra fee. Tax will make the internet more expensive.

Interesting article about nexus (that's what the connection is called), particularly with regard to commissioned salespeople:

[www.catalogsuccess.com]

Personally, I think this is a non-starter, particularly once the retailers get wind of it, since pay-for-performance referrals are so important to online retailing, but we'll see. {ProfJonathan}

@spinachdip:

Actually, if your home state use tax is higher than the sales tax where you bought it, you're supposed to pay the difference.

The reason states are going after Amazon is because they are big. They want to eventually force this on every internet retailer. I don't even want to imagine the burden this would put on tiny 1-2 person internet businesses to calculate and collect state sales tax x50 plus do the returns every month. Many states also have county and city calculations.

The idea of taxing the internet on a state taxation basis is an idea hatched by petty dictators in state legislatures who think the internet is a bunch of tubes.

Use tax was implemented when people used horse & buggy, it doesn't work in todays world.

I am so tired of bailing out my government with my tax dollar.

@Concerned_Citizen: You haven't scratched the surface. In addition to the state sales tax (4%), there is a county sales tax that varies from county to county. We have 67 counties in New York. When you go to a regular store, that's not a big problem, but when you buy a car in New York State, you get charged sales tax based on where you live, not where you bought the car. So the dealer has to look up the tax rate based on your zip code. This is to keep people from doing what they do with everything else, which is to shop in some other county where the sales tax is lower. It doesn't matter when you buy a sweatshirt, but one point of sales tax on a $20,000 car is $200, and people will drive across the state to save $200.

@scarysnow: I
guess you'd rather move to a state with a reasonably functional state government. Good luck with that. I've lived in several states, and I have found the state governments in all of them to be quite dysfunctional. Albany is, alas, exceptionally so. They embody the worst anyone has ever said about Washington, except on a somewhat smaller scale.

For example, we have pork barrel spending in Albany. The dollar amounts of the pork get allocated based on whether you are a member of the majority or minority party. Thus, the Assembly has been dominated by Democrats since the beginning of time, and the Senate has been dominated by Republicans (with a couple very brief breaks) since the beginning of time. Your ability to redirect tax dollars is determined by your politics, which perpetuates the parallel two-party system in Albany's legislature. This also guarantees that congressional districts will be hopelessly gerrymandered, but I digress.

Budgets are negotiated by "three men in a room," those being the Governor, the Speaker of the Assembly, and the Senate majority leader. The budget is due on April 1st, but it is taken for granted that it will be at least several weeks late every year, if not several months, depending on whether it's an election year, or whether one of the parties, usually the Governor decides to actually take the responsibilities of maintaining the state budget and suppressing pork barrel spending seriously that year. Unfortunately, the longer it takes to adopt a budget, the more time legislators have to insert yet more pork into the resulting bill. The more pork, the less any one item will be noticed, no matter how ridiculously frivolous it might be. So thousands of local projects that ought to be approved or disapproved by county supervisors or even village boards, end up being paid for with state money.

The New York State government doesn't need more money. They need less. That aside, this pathetic grab ain't likely to fly.