Amazon.com along with other online retailers may be required to collect sales tax in New York State if a proposal by Governor Eliot Spitzer is adopted. Amazon is opposed to such a plan.
Residents currently are on an honor system when it comes to reporting Internet purchases and paying taxes on those items. Online retailers with a brick-and-mortar presence in the state are required to collect sales tax at the time of the transaction.
Other online retailers are not required by law to collect sales tax. The plan by Spitzer would require all online retailers with annual sales of $10,000 or more in New York to collect the state’s minimum sales tax. The state estimates that would bring in $47 million a year.
Amazon vice president of global public policy Paul Misener says the proposed sales tax would be a radical departure from anything that’s being done in the U.S. The company says it’s not against collecting states sales tax but wants the laws to be simplified. It says that there are too many taxing jurisdictions that impose sales tax on different sorts of items.
The New York Times makes a good point about the tax issue. "Walmart.com sells all kinds of things in all sorts of places. And because Wal-Mart has stores everywhere, it has to collect sales tax following all those rules. So does Target.com, and who runs Target’s Web site? Amazon."
From a consumers standpoint no one wants to pay more taxes and from Amazon’s viewpoint it does not want to lose potential customers to brick-and-mortar stores offering more competitive prices. As for the state of New York as with any state government $47 million extra a year sounds pretty good.
