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]

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