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New York to Implement an 'Amazon Tax'
theodp writes "NY Governor David Paterson is expected to sign a bill requiring online retailers to collect sales taxes on purchases shipped to the state, even if they have no operations or employees working there. The so-called 'Amazon tax', which applies to Internet retailers who derive sales through affiliate programs, would end what for many New Yorkers had been tax-free shopping and generate an estimated $50M in revenue this fiscal year. Experts predict that other states could follow suit with similar provisions."
but i know in Ohio, we're supposed to report any out of state purchases that arrive in Ohio (like all the computer stuff i get from newegg) on our 1040s. i say supposed to because i haven't reported any of my purchases any year. god i hope no one from the ohio tax office is reading this...
...shopping in PA malls just over the border, and sent them notices that they had to pay NY sales tax. NY also is trying to force Seneca store owners on sovereign indian land to collect NY sales tax.
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Those are called Use Taxes. IMO, they should also be ruled unconstitutional in some cases:
/might/ be okay, provided the vehicles have a tax burden associated with them. And, vehicles do, though the burden probably ought not to be measured by the sales tax inside the state, but rather whatever vehicle-specific surcharges the state has.
INIAL, and I may be woefully incorrect about all of this, but, IIRC, the supreme court has ruled in the past that an interstate commerce tax is unconstitutional if it fails to violate either of the following:
1) must be compensating for an identifiable a tax burden. Decreased revenues due to 'lost sales' in other states do not count - clearly the NY interstate book tax would fail here.
2) The inter-and-intrastate taxes must be approximately equal. (You can't jack up the taxes for interstate commerce beyond what you demand of your own intrastate commerce. NY is probably okay here.)
The Use Taxes on vehicles
It's not that simple. The Supreme Court placed specific requirements on states and cities before they are allowed to do this, and I don't think any of them have complied yet.
I have a problem with governments being able to reach beyond their jurisdiction to demand out of state / out of city companies collect their taxes for them.
I sell things online, and I don't want to be liable for collecting taxes for 30 states and maybe hundreds of cities. I've heard that the big internet retailers are fine with these taxes, because it's a burden they can easily absorb while hurting smaller internet retailers.
You know I might get flamed for this, but.....
......It's NOT FAIR. Although, I like the idea of getting away with not paying taxes and I have done it for years, it is not fair to local businesses. Only suckers (or principled individuals) paid taxes on their computer equipment in the last 10 years. Local equipment suppliers have a very hard time competing with it, locally at least, and then must rely on out of state sales themselves. So it's kind of ridiculous if you think about it.
The Constitution has nothing to do with this. The founding fathers never envisioned that a person in California (did not even exist yet) and another person in New York could so easily create a sales transaction between them, AND within such a reasonable period of time, deliver the products. I don't think that they thought, or understood, that it could become such an EFFECTIVE loophole to bypass taxes. I don't understand the logical arguments behind interstate commerce laws, but perhaps it was to protect businesses from having to compete in an unfair environment. States could tax the hell out of "foreign" goods thereby decreasing competition (bad). However, the fact that the sending state is not allowed to tax it either, creates the loophole. I dunno, it's just my thoughts on it, and I admit that I don't understand the basis for the laws. I do understand it's effects however, and that leads to the real problem......
So you have a choice. You can:
1) Support your local economy and state by spending the money on the sales taxes there...
or
2) Bypass taxes and spend a much smaller amount giving it to FedEx, UPS, USPS, or DHL.
Which one do you want? Give the "taxes" to a corporation or to your local government where there is a small chance it might go towards something meaningful to you?
Of course, this might all be a moot point since rising fuel costs are going to close the gap between Shipping Costs (the alternative tax) and local Sales Tax.
Then we'll see a bunch of businesses pop up in New Jersey and Connecticut which will forward packages to New York. They're not the buyer or the seller, so they'd have no obligation to tell New York what they shipped to whom and when.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
The insurance companies in Florida got a pretty nice 12-year run of luck after Andrew where they weren't paying out substantial claims but were still collecting inflated premiums,. There was a lot of whining from insurers about "we need increases so we can replenish our reserves", but absolutely nothing mentioned about the billions that were collected between 1992 and 2004 that went straight into shareholders' pockets, the billions collected in the 70's and 80's prior to Andrew, or the billions in profit they've seen since 2004. They're insurance companies, they're paid to assume risk, so pardon me for not feeling their pain when they have to pay out the claims they agreed to. The fact that one of them is getting their knuckles rapped because they're willfully refusing to provide documents subpoenaed by the state isn't helping their relationship with the state either .
I'm looking forward to the unimaginable degree of whining we're going to hear from this industry once the San Andreas Fault has its next big slip.
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So the cure would be to bar sales to New York residents letting them know why. A few years of New York residents not being able to buy things online should make them wake up and smell the coffee.
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This may have been true (not having been there, it would be difficult to say one way or the other) but realistically irrelevant in many ways. At the time the Constitution was ratified, we didn't have the internet, shipping methods or many things that have altered the world we live in. The job of our courts is to interpret the Constitution's intent and apply it to modern-day situations, which it was obviously not equipped to deal with since it had no knowledge of the changes that would occur. So to say that this is unConstitutional simply because the founders of our country could never have conceived of the ease of internet shopping is a bit silly. And, in our country, the courts are correct until overturned. That is the way our legal system works. So if you feel the ruling is unConstitutional, your recourse would be to sue the state of New York and take it up to the Supreme Court who could then make a direct ruling on whether or not their bill is unConstitutional or not.
Until then, it is a Constitutional as any of the rest of our laws that are drafted to deal with realities that a document written in 1787 couldn't possibly have conceived of.
"Does bouncing count?" - Silk, Magician's Gambit by David Eddings