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BizReport : Ecommerce : April 15, 2008
'Amazon Tax' bill close to becoming law
It seems likely that a law requiring online retailers to collect sales tax on all items delivered to residents of New York will be approved, causing a potential e-commerce headache.
New York State legislature has passed what has been nicknamed the “Amazon Tax” bill. All that remains is for Governor David Paterson to give his approval and it will become law.
In a nutshell, online retailers who have a “physical presence” in the state of New York, which includes online affiliates residing there, will be deemed to have a physical presence in that state. Those opposing the tax feel that online operations ought not to be deemed a “physical presence”.
Mark Micali, DMA VP of government affairs, thinks the proposed law is “an unabashed attempt by New York State government to expand the reach of its tax system across state borders to businesses which have no physical presence in the state.”
How long before other states decide they’d like a slice of the $50 million in revenue that New York is expected to reap from the “Amazon Tax”?
Tags: e-commerce, sales tax
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Comments
Inevitable. We need to either increase the tax rate or broaden the tax base. This broadens it. However, if the e-commerce industry is going to fight for anything, it should be to get e-commerce sales taxed at a lower rate.
Posted by: bmesc on April 16, 2008 06:23