Let the Tax Collection Begin On Online Purchases

[EV_Ares]

f you live or work in New York State, look closely when buying online.

Last Sunday, many but not all online retailers started to collect sales tax on goods shipped into New York. Most significantly, Amazon.com, the largest online store, was one of them.

In April, as part of its 2008-2009 budget, the state legislature passed what is being called the “Amazon Tax.” What’s new isn’t actually a change in the law—New York residents always owed tax on their purchases—it is an expansion of the law that is meant to force online retailers to collect the tax and send it to New York. Any company with physical operations in the state—such a store or office—already collects tax for the state.

Indeed, the state calculates that of the nation’s top 20 online retailers, 18 had already been collecting tax because they, like Dell and Staples, had operations in the state. The remaining two—Amazon and Newegg.com—have now registered to collect taxes.

The state now says tax must be collected by any online store that gets customers referred to them by Web sites based in the state. In late April, Amazon filed suit challenging the state law. And on Friday, Overstock.com filed a related suit. Overstock, has stopped doing business with its affiliates in New York and so it will not collect sales tax for now.

rest of the article @ link: http://bits.blogs.nytimes.com/2008/06/02/let-the-tax-collection-begin/index.html

[liberalmike27]

1. Sales Taxes are Regressive Taxes

Sales and gas taxes, as well as most fees our government levies are regressive in nature. They hurt the poor much more than the rich, and are a much bigger portion of the income. Anything that cuts them off makes me happy.

I think it'll really hurt online sales to add sales tax, as you already have shipping to pay. Usually, when you add shipping onto most items, you don't get much more than the convenience of having it delivered to your house anyway. I'd just as soon try to keep sales tax off the Internet forever, and get rid of most other sales taxes too.

When you read Perfectly Legal, by David Cay Johnson you see that as a percentage of income, the poorest fifth pay as much percentage wise in all taxes as the upper quintile. That just isn't right, and part of the reason this happens is the levy of gas and sales taxes.

[AP]

2. I wish the online retailers gave purchasers the choice of whether they want state taxes

withheld.

For people who have to do the calculation on their state tax forms, that would save a ton of time.