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New York to Implement an 'Amazon Tax' 411

Posted by ScuttleMonkey
from the death-and-taxes dept.
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."
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New York to Implement an 'Amazon Tax'

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  • by YesIAmAScript (886271) on Saturday April 12, 2008 @01:36AM (#23044386)
    It's not Constitutional.
    • by timeOday (582209) on Saturday April 12, 2008 @01:38AM (#23044396)
      My thoughts exactly. This has "interstate commerce" written all over it.
      • by davetd02 (212006) on Saturday April 12, 2008 @03:25AM (#23044776)
        Not so fast: You're right that thanks to the "dormant commerce clause," New York can't burden out-of-state commerce or commerce that just passes right through New York without stopping. For example, New York can't tax goods that pass through New York on their way from Maine to Florida on I-95, nor commerce that happens in other states.

        But, almost every state that has a sales tax also has an excise tax for people who import goods from out of state. For example, in most states if you import a car into the state then you pay the sales tax on the car even if you bought it in a state with no sales tax.

        New York can very constitutionally tax goods that are used in New York. And it can reach Amazon to enforce it because Amazon has "purposefully availed" itself of the New York market by advertising there and shipping orders there. See the case Asahi Metal.
        • by superwiz (655733) on Saturday April 12, 2008 @09:48AM (#23046312) Journal
          Excise tax on imported goods is buyers' burden. And the burden for compliance is on the buyers as well. With cars it's easy to track because a car must be registered in the state into which it has been brought. NY State is proposing to make this tax the sellers' burden. It's not the same situation. The question is whether they can compel Amazon to report to the NY State information about Amazon customers with NY shipping addresses. If they can't, then this is an exercise in futility. They might as well pass laws about non-US nationals on non-US territory.
        • Re: (Score:3, Interesting)

          The key difference is that it is the /individual/ who must pay the excise tax. That's a far cry from requiring every single business who ships into New York from paying. If this is allowed to stand, could you imagine the precedent it will set? Picture life as an online retailer, where you must pay separate taxes to all 50 states based on how your sales break up.

          For a lot of small retailers, the answer is simple. Stop selling to New York.

        • by Dun Malg (230075) on Saturday April 12, 2008 @12:07PM (#23047180) Homepage

          tax also has an excise tax for people who import goods from out of state.
          This is precisely where their argument (and yours) falls apart. They only have legal standing to demand tax from the person bringing the item into the state. They have no legal right to demand that Amazon, an out of state seller, do anything at all for them. Any taxation they demand has to come from regulation of the buyer. The Asahi Metal Industries v Superior Court of California was about product liability, not taxes. The Interstate Commerce clause trumps a narrow ruling on what constitutes a business presence for purposes of liability. If Amazon was sending Amazon-branded* flaming balls of pitch to New York that were starting fires, the Asahi case might have been relevant, but they're not---- they're sending mundane products, made by other companies, through the US Mail!

          * note that a key fact in the Asahi case was that Asahi was the manufacturer of the product in question.
    • Re: (Score:3, Insightful)

      by Jafafa Hots (580169)
      You haven't been paying attention the last 7 or so years have you?
    • How exactly has that stopped the government from doing whatever the hell it wants for the last decade or so? Just raise the specter of national security and every judge in the country (especially the Supreme Court) will roll over as always. Just say that the tax revenues go to anti-terrorism activities, or that the taxation is a way of regulating and controlling what comes into the state, to make sure it's not contraband.
      • by flyingsquid (813711) on Saturday April 12, 2008 @02:13AM (#23044532)
        How exactly has that stopped the government from doing whatever the hell it wants for the last decade or so? Just raise the specter of national security and every judge in the country (especially the Supreme Court) will roll over as always. Just say that the tax revenues go to anti-terrorism activities, or that the taxation is a way of regulating and controlling what comes into the state, to make sure it's not contraband.

        If we don't pass this law, then terrorists will be able to buy books and other goods tax-free. It is highly probable that terrorist cells operating in New York will need to order books and electronics from online vendors. Taxing these sales means that it will now cost terrorists 8.4% more each time they order terrorism-related materials from Amazon, dealing a serious blow to Al Qaeda's finances. Imagine how furious Bin Laden will be when he sees that his sleeper cells have gone over their budget.

    • by superdave80 (1226592) on Saturday April 12, 2008 @02:10AM (#23044516)
      Not constitutional in our normal, sane eyes, but we are talking about the courts. They make crazy decisions all the time, because they over think the minutiae of these cases. It should take them all of five seconds to declare this unconstitutional, but they probably will say it is fine. Don't think so? Look at use tax.

      Relevant sections of the constitution state:
      "The Congress shall have Power To ... regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;"

      "No Tax or Duty shall be laid on Articles exported from any State."

      Pretty much sounds like states can't make me pay a tax when passing goods from one state to another, right? Yet states have somehow subverted this by declaring it a 'use' tax, not a 'sales' tax. They claim that they are not taxing the sale of the item, but rather, the use of the item in their state. This would almost be a plausible argument, except for two tiny problems:

      1. The use tax rate is the exact same as the sales tax rate.
      2. The use tax only applies to all items used in a state, but ONLY items brought in from another state.

      If this were a REAL use tax, every item 'used' in the state would be subject to it. The use tax is so obviously nothing more than an interstate tax by a different name. And the courts, almighty protectors of our constitutional rights, have gone along with this bullshit argument.
      • Re: (Score:3, Insightful)

        by killdozer3k (779295)
        Precisely, Part of the problem is that the law is unequally applied. i wish I had my own right-wing/libertarian ACLU to go around suing for fun and profit all the time. int his case a use tax implies that something is used. Whats next? Taxes from ever state an item is passed across? Why not? Amazon should refuse to collect the taxes and see what NY can do about it. They cant stop Fedex from shipping items from Amazon to NY. I wonder what would happen if someone sued a state fro NOT collecting taxes on a
        • Unfortunately you can't sue a state for not taxing. I've no references at the moment, but it was decided a while ago that you have no standing to sue solely by virtue of being a taxpayer. I don't believe citizenship counts for anything either. So next time you vote remember: these people can piss away your money however they please, and you can't sue them for it. Might want to trust them first, then.
      • by davetd02 (212006) on Saturday April 12, 2008 @03:47AM (#23044860)
        The constitution prohibits EXPORT taxes, not import.

        There's a big historic difference between the two.

        New York's tax is, for all practical purposes, an import tax.
        • by davetd02 (212006)
          I should have put this in my last post, sorry. Here's a treatise talking about why "export" means "export." [onecle.com]

          Clause 5. No Tax or Duty shall be laid on Articles exported from any State. ...
          This prohibition applies only to the imposition of duties on goods by reason of exportation. The word âoeexportâ signifies goods exported to a foreign country, not to an unincorporated territory of the United States. A general tax laid on all property alike, including that intended for export, is not within the

      • Re: (Score:3, Funny)

        by CastrTroy (595695)
        Have you ever considered that perhaps, the constitution is a little out of date? Do you think they ever conceived that people would be able to buy everything they needed, easily from another state? Couldn't you just find a state without sales tax (i'm sure one must exist) and buy everything from that state. Sure it wouldn't be feasible for some items, but for many big ticket items, which would incur a lot of tax, like cars, electronics, and furniture, it would probably be beneficial to the consumer. May
        • by rohan972 (880586) on Saturday April 12, 2008 @09:23AM (#23046180)
          Have you ever considered that perhaps, the constitution is a little out of date?

          Yes. If we place any value on the rule of law, amending the constitution is the proper response, not ignoring (or reinterpreting) it.

          Do you think they ever conceived that people would be able to buy everything they needed, easily from another state?

          This has always been feasible for people who live near the borders. Not so much for others.
    • If you read on your taxes, you are supposed to declare your mail-order purchases. If you didn't pay a sales tax in another state, you have to pay it in your state of residence. I've always thought this silly myself, but this "Amazon tax" isn't new.
      • by arth1 (260657) on Saturday April 12, 2008 @03:45AM (#23044850) Homepage Journal
        This is called a use tax, and is a loophole that most if not all states who have sales tax use to tax out-of-state purchases. They get away with it because it applies to EVERYTHING, whether bought in-state or out-of-state, but the tax is waived if you either paid sales tax or the purchase was exempt from sales tax (like food and clothing in many states).

        Why does NY want this new tax if they already have use tax? For two reasons:
        1. Most people don't declare use tax, even though it's illegal not to. Either they don't understand that they have to, or they gamble on not being audited.
        2. The state loses interest on the money for several months, because use tax is not paid until you declare taxes next year. Something you buy in January 2008 won't give the state the money until April 2009 (unless you declare your taxes earlier).


        Quite frankly, don't be surprised if new taxes like these appear all over the place. The plummeting economy and rapid devaluation of the dollar means that even states have to collect money where they can.
      • Re: (Score:3, Informative)

        by jmorris42 (1458) *
        > If you read on your taxes, you are supposed to declare your mail-order purchases.

        Yup. And if Amazon had the smallest operation in the state of NY they would have to collect and pay NY taxes. But they don't so I'll be blown if I can see how the State of NY will be able to force a CA business to collect a NY tax, do all that bookkeeping and forward the money to NY. If they succeed it will destroy the last fig leaf of Federalism.
    • Re: (Score:3, Interesting)

      by EdIII (1114411) *
      You know I might get flamed for this, but.....

      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
      • Oh please (Score:3, Interesting)

        by FranTaylor (164577)
        Your argument holds no water at all. Sales transactions have been conducted remotely via the mails since before the founding of our country.
        • Re: (Score:3, Funny)

          by EdIII (1114411) *
          "conducted remotely via the mails since before the founding of our country"

          I did not know the pilgrims ordered their canned cranberries from catalogs from outside of their "states".

          You learn something new everyday I guess....

          Seeing though, as we are talking about interstate commerce, can we keep the arguments to AFTER the signing of the Declaration of Independence and the ratification of the Constitution?

          Or we could do it your way and talk about the Odin Express (TM) and Thor's Mighty Catalogue of Sharp and
          • by Smidge204 (605297)
            The pilgrims have nothing to do with it. Don't be a douchebag.

            By the time the Constitution was drafted, there were already colonies with independent economies and even separate currencies. Trade between colonies was without a doubt a very common thing. Just because it didn't take place over thousands of miles doesn't make it any different, and just because it took days instead of minutes doesn't make it any different.

            For the record, online sales are probably STILL going to be cheaper from many retailers if
          • Re:Oh please (Score:5, Informative)

            by duffbeer703 (177751) * on Saturday April 12, 2008 @09:34AM (#23046236)
            Actually, you have no clue about this. In the colonial days, British law essentially prohibited significant industry from forming in the colonies. So if you wanted to order a manufactured good, including cloth, you had to order it from England.

            Mail ordering has continued since then. In the late 1800's, many people ordered kit houses from the Sears catalog. Until the 1940's, if you didn't live in a city, you basically had to mail order many products.
      • by WK2 (1072560)
        You start by saying the Constitution has nothing to do with this, and then you seem to argue that this is indeed unconstitutional, but the constitution is obsolete. You make a good argument for this part of the constitution being obsolete. However, if that is the case, legislatures need to amend the Constitution, not ignore it.
        • by EdIII (1114411) *
          I guess I should have been more clear. I mean to say that the Constitution and it's language involving interstate commerce really has nothing to do with the "heart" of the argument for or against taxing sales derived from out of state customers in our modern times, especially ones derived from the activity on the Internet. To say it is unconstitutional and leave it at that, is really just sidestepping the argument and ignoring the problem.

          The Constitution is protecting the behavior right now, but it did n
      • Someone needs to tell the government to fuck off and stop double, triple and quadruple dipping into the Taxpayers pockets.

        1) INCOME TAX (Both Personal and Corporate)
        2) SALES TAX
        3) $$$ GAS TAX $$$
        4) Assorted 'Fees', 'Service Charges' and 'Fines'.

        If they were doing their job right they'd only need to tax income only tax sales. Clearly the system is busted because its got its hand out to you on payday, grocery day, garbage/recycling day, even the day you die (Estate Taxes) etc... It is precisely because rich p
        • Re: (Score:3, Interesting)

          by EdIII (1114411) *
          Well you are talking about something a heck of lot larger and well outside the scope of the article. It's not offtopic exactly, but "above" topic so to speak.

          That being said, I do wholeheartedly agree with you. "If they were doing their job right they'd only need to tax income only tax sales."

          If you mean to say there should be only ONE tax in the the whole country and that is all we will ever pay, then AMEN BROTHER, AMEN.

          If we obliterated the IRS, and sent a bill to every single state for it's portion of
        • Re:TAXED TO DEATH (Score:5, Insightful)

          by karmatic (776420) on Saturday April 12, 2008 @09:21AM (#23046172)
          It is precisely because rich people are utilizing loopholes to avoid taxation like purchasing land and such.

          No, it is precisely because the government spends way too much money. If our government spent less, there would be less need for taxes.

          As a practical matter, it is always going to be difficult as a matter of practicality to tax the rich, or the corporations for their "fair share", as the more you raise taxes, the more profitable using offshore tax havens, etc. become.

          Corporations, for example, must be able to deduct business expenses. If you don't, any business with razor-thin profit margins (a good thing, competition) would be bankrupt. A 5% flat tax would be wonderful for my software company with 95%+ margins, but "unfair" (and lethal) to someone making 1-5% doing manufacturing. They would have to raise their rates, making it difficult to compete with imports, requiring more taxation on imported goods to maintain a "level" playing field.

          So, it's relatively easy for modern businesses to structure relationships with other companies (not in the US) by licensing technology (for a hefty fee), borrowing money, etc. Payments can go into trust funds, foundations, etc. outside US jurisdiction. To stop these kinds of games, you would need to ban:

          - owning, managing, and receiving payments from foreign corporations
          - banking by private citizens using banks located outside the United States
          - ownership of US corporations by foreign corporations and vice-versa
          - prior approval by the US government for all business transactions between US companies and foreign companies, in order to ensure that all contracts are "fair", and not allowing money to be funneled outside the US
          - use of foreign-based prepaid debit cards/gift cards, and purchase of us-based cards by foreign nationals and corporations

          Even if all this did happen, unscrupulous people would simply conspire with those outside the United States to act fronts. Long story short - the more you attempt to raise taxes on these people, the more profitable it is to be a "tax cheat", and the less revenue you actually bring in.

          Besides, I don't know about you, but I'd rather not live in a world like that. On the other hand, reducing spending by the government would go a long way towards fixing budget problems. How about starting with the illegal/unconstitutional ones?

          That being said, the simpler and easier the tax code is, the harder it is to dodge taxes. The problem isn't the rich, it's the insane inefficiency and incredible waste of government. A simple straightforward sales tax applied to imports and domestic sales (with a prebate to avoid screwing over the poor) would eliminate most loopholes, practically eliminate the need for the IRS (saving a decent amount of money), and save so much time and effort it's scary.

          No "tax day", as your taxes are always paid. No itemization, no deductions, no worrying about whether this is an acceptable business expense.
      • If that is the case then the constitution should be changed, or amended, using the legal process to do so. The ability to change the constitution was put in precisely for this reason. Government does not get to skip due process simply because it is convenient.
    • Re: (Score:3, Informative)

      How so?

      It's basically two things: a use tax, and a scheme to collect it.

      The Supreme Court cases on State use taxes are clear: they are Constitutional.

      So that just leaves their scheme to collect. The obvious problem here is the Quill case, but they seem to have found a somewhat plausible argument to distinguish from that, so I could see this go either way on that.

  • How does this work? (Score:3, Interesting)

    by The Ancients (626689) on Saturday April 12, 2008 @01:41AM (#23044408) Homepage

    I'm not an American, so I don't know how the system works.

    My guess is a sales tax is charged (we have GST - Goods and Services Tax - here in New Zealand) on goods sold within the state. Now I presume the purpose of this consumption tax is to pay for goods and services beneficial to the residents of that state.

    Hence I guess the argument lies with whether the burden of payment for this tax (and reaping the benefits of such) comes down to those producing said goods and services, or consuming them.

    Anyone care to clue us non-Americans in on how this is supposed to work?

    • by Ecuador (740021) on Saturday April 12, 2008 @01:46AM (#23044432) Homepage
      The tax is supposed to be collected where the purchase is made. So, if you are in NY and order something online, you are supposed to pay the NY tax on it. However, if the retailer does not have an actual presence in the state they are not obliged to collect the tax in behalf of the state, and in that case the consumer has to declare it when filing for state taxes. I guess they have noticed that not many people declare their purchases to pay tax on them...
      • by doktor-hladnjak (650513) on Saturday April 12, 2008 @02:08AM (#23044510)

        Courts have determined that when you buy something through the mail, the sale takes place at the seller's location not the buyer's location. Hence, when a NY resident buys something from Amazon, the sale takes place where Amazon is based--in WA. The exception is if the seller has a "substantial business presence" in the buyer's state, in which case the sale is considered to have taken place there.

        It's not even a question of the seller not being obliged to collect the tax. In the example, NY has no authority to tax sales completed in WA.

        To get around this, many states have so-called use taxes that are typically equal to their sales tax rates. Use tax is collected when a resident brings a good bought out of state back into their state of residence. The rationale is that the use of the item is being taxed, not the sale of the item. In practice, states only routinely collect use taxes on cars, because it's typically part of the process of registering and titling a car in a new state.

        Personally, I can't see how NY is going to be able to enforce this law. They can't compel businesses outside of their jurisdiction to collect and remit these taxes without some sort of federal law.
        • Courts have determined that when you buy something through the mail, the sale takes place at the seller's location not the buyer's location.

          Not quite that simple -- the seller doesn't have to pay taxes on out of state sales, which is different from brick and mortar stores. If you travel out of state to buy something from a brick and mortar, you pay that store's tax. If you travel via the web to an out of state web site, you don't pay taxes based on where the web site is, you simply don't pay any taxes.

          • by flabbergast (620919) on Saturday April 12, 2008 @03:07AM (#23044720)
            Most states have Sales and Use tax. The use tax is for goods purchased for use within the state. So, the GP is correct: in most states you're supposed to pay taxes on goods purchased over the Internet or through catalogs or if you purchased it from a state with no sales tax.

            If you look at most state personal income tax forms you'll generally see an area for calculating tax on goods purchased from other states or over the internet. I know off the top of my head that Wisconsin, Illinois, Colorado, Ohio and Utah all have some type of line for calculating Use tax on their personal income tax forms.
      • the consumer has to declare it when filing for state taxes. I guess they have noticed that not many people declare their purchases to pay tax on them...

        NY State, Income Tax form IT-201 (the main tax form, like a federal 1040):
        Line 59: Sales or use tax Do not leave line 59 blank:

        Now... you can either keep track of all of your out of state purchases and pay the exact amount or you can just go by the income range table:
        up to $15,000: $5
        $15,001-30k: $15
        $30k-$50k: $21
        $50k-$75k: $27
        $75k-$100k: $40
        $100k-$150k: $56
        $150k-$200k: $72
        $200k+: .0361% of income (.000361) or $200, whichever is smaller

        If you don't fill in the line or enter a 0, you're basic

        • But I guess that's a rant for another day.
          I'd say that's a rant for this day, considering how close we are to returns' due dates. And so I say, right on! Keep ranting. The bigger the forum the better.
    • by Dahamma (304068)
      I think one reply already gave the genreal idea, but was fairly wordy/roundabout... so, to summarize:

      In the US an interstate sale legally occurs in the seller's state (unless the seller has a "presence" in the buyer's state). US states are Constitutionally not allowed to create laws regulating interstate commerce, so for example if someone in New York buys something from a company in California, the state of New York can't force the California company to collect sales tax.

      To answer your question - the burd
    • Re: (Score:3, Interesting)

      The US political divisions can all levy their own sales taxes. There is no national sales tax, but there are state, county, and city taxes, not to mention all sorts of special tax districts -- mosquito abatement, hospital, etc -- which all have their own sales taxes, altho I think these last have to be given permission by the states, cities, and/or counties -- those details escape me.

      If you have a brick and mortar store, it stays put and your sales taxes don't change from one sale to the next, only when th
    • Since you aren't an American, I presume you don't know, interstate and intrastate commerce and taxes were actually a very big factor in the American civil war just over a hundred years ago. Although it seems like more stupid greed and politics, this issue was settled at gruesome cost a century ago, and we shouldn't even touch this topic with a ten foot pole. Ever. IMHO.

      To belabor the point... (sorry!)
      This also relates to the state vs. federal rights which declares that federal law overrides state law,
      • Yeah well unfortunately they settled it wrongly way more than a century ago so we're still going to have to debate it today. I'm glad, however, that someone else realizes that our civil war wasn't entirely about slavery.
    • by Charcharodon (611187) on Saturday April 12, 2008 @07:04AM (#23045590)
      Generally there are three budgets that need to be funded. Federal - the whole country. State - everything within the State. Finally County/City, sometimes there are seperate County(Parish) and City budgets.

      Typically Federal is funded by Income, Medicare, Social Security, Capital Gaines, Fed Fuel tax, import/export tarrif, drug seisures.

      State is typically funded by a State Income taxes (not all states have income tax), State sales tax (3-9%), State fuel tax, fees (license & permit). State funds typcially tend to pay for local infrastructure (roads, water, power, bridges), education, health care, arts, wild life reserves, etc. It's hard to say that the only ones that pay for those things because there is so much overlap from the cities and federal government.

      County/Parish/City is typically funded by property tax (usually just land/house, though things like cars, boats, aircraft can be taxed as property), permit fees/licenses (building, business, etc), services fees (water, sewer, fire dept)

      While I personally love no sales tax on the internet, it does bleed the State budgets of money, which of course creates new opportunities for the Federal Gov't to come in and pay the bills. Congress is never shy about using that money to blackmail the States in to doing what they want, by threating to withhold the funds. Federal highway funds have been used for years to push varies issues such as polution regs and drinking age limits.

      Most people forget that the US is actually 50 different countries bound together by the Constitution. Each State in turn has its own Constitution which all are similar, but there are some differences. There has been a constant fight between State & Federal government over who is in control of what, generally who is in charge of the money. The Federal Government has been slowly creeping into what traditionally is State territory, sales tax just being the latest. Basically the only thing the Feds are supposed to do is protect the borders, raise a national army, print money, and regulate commerce nationally & internationally, and treaties.

      What's funny these days the Fed's are a little on the broke side so many States are looking to go there own way again. Internet sales tax, education reform, polution, fire arm regulation (the federal government has very little actual say in this, though you wouldn't think so by what you see in the news), and drinking age being the hot topics of the day.

      So that should make it clear as mud for you. If you did understand it all then there are many very high paying jobs waiting for you in the US.

  • by suck_burners_rice (1258684) on Saturday April 12, 2008 @01:42AM (#23044418)
    This sounds like some kind of serious hogwash to me. The laws applying to Internet sales should be no different than those which apply to catalog sales. If you order something out of a catalog and you have it shipped to the same state where the catalog company is, then you pay the sales tax in that state just as if you had gone to a store in that state and bought the item. But if the catalog company is in Maine and you are in Florida, then you don't pay Jack Schitt for taxes. An internet site that sells stuff is nothing more than an electronic version of a page in a catalog. Amazon is nothing more than a vast catalog of products, as are most other electronic retailing sites. So if you're in the same state where Amazon is, it makes sense that the sales tax should be added to the price, but if you are in any other state, there should be NO tax of any kind on the purchase. Amazing and incredible that every time politicians are faced with a spending problem, they just invent more taxes, instead of reducing all the unnecessary spending. Or as Mark Twain said, "Suppose you're an idiot. And suppose you're a member of Congress. But I repeat myself."
    • by digitalbeing (84400) on Saturday April 12, 2008 @01:47AM (#23044436) Homepage
      Whether you order from an out-of-state catalog or an out-of-state internet retailer, you owe local sales tax on the purchase, at least in each of the three states I've lived in.

      However, the out-of-state business is not obligated to automatically collect it - that's the interstate commerce part. You are supposed to self-declare it. How many people do you suppose keep detailed enough records to calculate this on their state income tax form? Or bother to declare any of it?
      • Re: (Score:2, Interesting)

        by davolfman (1245316)
        I'm pretty sure it varies from state to state. CA does it, but I don't think CO does for example. As I explain to the occasional european there are legal differences between states because of the fact that the US is a union of states rather than a state with provinces.
        • by Anpheus (908711) on Saturday April 12, 2008 @04:42AM (#23045098)
          Oh so the United States is kind of like the European Union?

          No, seriously. The EU is the ironically more successful implementation of the ideals laid out by our founders. It's missing as firm a constitutional backing, which I imagine will be rectified eventually, but cooperation through the EU combined with shared defense forces through NATO has basically given the exact situation the founders wanted the US to become. A large number of varied states with different philosophies under a shared infrastructure for commerce and dealing with legal issues, with minimal overhead over those member states. And the EU "federal government" is tiny, indeed.
          • Re: (Score:3, Insightful)

            by yuna49 (905461)
            Have you ever heard of the (unelected) European Commission? Battles have been fought for decades now over the power of the EC bureaucrats to impose regulations at whim with little oversight by the European Parliament. Then there's the little problem that the proposed EU "constitution" is about ten times longer than the American one and written in impenetrable bureaucratese. Constitutions are supposed to set basic structures in place, not govern policy details. It's no surprise to me that getting public s
      • (I sure hope I understand this.)

        This is a problem, what New York is doing. I don't think they have the legal authority to do this. I'd guess this could potentially reach SCOTUS.

        From what I understand, a commission is like paying someone for hawking their product. But the key difference is this. Unlike a sales person earning a commission for selling cars at a car lot, these people who are earning a commission aren't located at/employed by Amazon.com.

        I think affiliates are more like people who would be paid t
    • This sounds like some kind of serious hogwash to me. The laws applying to Internet sales should be no different than those which apply to catalog sales.
      They should, yet people fear the internet because pedos use it while not fearing the postal system they also use.

      I'm afraid rational reactions don't apply to the internet.
  • Thanks, folks, I'll be here all week. Try the veal.
  • by TXISDude (1171607) * on Saturday April 12, 2008 @01:43AM (#23044424)
    This is an eventuality, and a needed leveling of the playing field. Why should a multi-billion dollar company get a competitive advantage over local businesses? Hate taxes all you want, but hate them fairly, not just those on your local small businesses. If e-commerce continues to grow, and is not taxed equitably with other businesses, this becomes a tax break for the big internet based merchants, and they need it the least. Consider this another play on the idea of a fair tax - one that levels the playing field for all businesses
    • by SirGeek (120712)
      So.. Since I live close to New Hampshire (No Sales Tax), I shouldn't purchase from there regardless of them having the lower sale price ?

      Let NY do what Mass does, Says if your income is $ X, then pay $ Y as an assumed sales tax (usually much less than what I've purchased out of state).

      It gives them their money and I still save money over all.
      • I'm pretty sure NY already does this. See the poster above. Might want to double check your returns if you live in that state.
    • by Jeff DeMaagd (2015) on Saturday April 12, 2008 @02:14AM (#23044538) Homepage Journal
      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.
    • by Fjandr (66656) on Saturday April 12, 2008 @02:18AM (#23044552) Homepage Journal
      There's this part of the US Constitution granting sole authority to regulate interstate commerce to the federal government. Person A from State A buying goods from State B is an act of interstate commerce, and states have no authority to interfere in said transaction. Additionally, one state's laws cannot be applied to an entity that has no presence in that state. Without an entity having presence in a particular state, there is no jurisdictional authority.

      There is little in the law that is "fair" when multiple separate legal entities all have sovereignty within their respective borders. Particular states are always able to compete for the dollars of other people by creating more favorable business environments.

      I'm usually not in favor of defending federal control of something, but in the case of interstate commerce it makes a lot of sense to prevent individual states from denying access to their citizens of all the benefits of living in a confederation. If people go outside New York to shop, maybe it shows there's something wrong with the priorities of the New York legislature, rather than being "unfair" to local businesses.
    • Then the solution is to lower or eliminate local sales taxes, isn't it? Or at least reduce them to the point that the difference between local sales tax and S&H is negligible. You can think about it in terms of big businesses not being taxed enough, or you can think about it as local small businesses shouldering an unbearable tax burden.

      In fact, in a place like New York, you might bring in more revenue with a lower sales tax, more people staying local for big-ticket purchases instead of hopping over t
    • by LM741N (258038)
      Bull. Amazon has an advantage because they have excellent service, are convenient, and have a wide variety of goods. It has nothing to do with taxes.
  • by MarchTheMonth (1232442) <MarchTheMonth@gmail. c o m> on Saturday April 12, 2008 @01:53AM (#23044456)
    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...
    • Re: (Score:2, Funny)

      by Anonymous Coward
      We are.
  • by Jafafa Hots (580169) on Saturday April 12, 2008 @01:54AM (#23044464) Homepage Journal
    ...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.
    • I was going to suggest this. Some enterprising opportunist could open a book store just over the state line to avoid the sales tax.

      They could call it Borders.
  • by r_jensen11 (598210) on Saturday April 12, 2008 @01:55AM (#23044474)
    It doesn't sound too irrational to me. States can already tax you for making purchases out of state and bringing them within state borders. If you buy a car in a state where the sales tax is only 5% and your state's sales tax is 6.5%, the state can charge you a 1.5% import tax. I know that imported liquor is subject to excess taxes in Minnesota if it surpasses a specified volume. I'd be surprised if this didn't apply to other states as well.
    • by Dogun (7502) on Saturday April 12, 2008 @02:13AM (#23044534) Homepage
      Those are called Use Taxes. IMO, they should also be ruled unconstitutional in some cases:

      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 /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.
  • The Power to Tax (Score:3, Interesting)

    by kilodelta (843627) on Saturday April 12, 2008 @02:12AM (#23044526) Homepage
    I thought that only the fed could levy taxes on interstate commerce.

    Rhode Island gets around it by having what they call a Use Tax. Ask me if I've ever paid it. I haven't. I don't think anyone ever has.
  • Okay New Yorkers, it's time to talk to your governor, your state senators, and your congressmen and let them know what you want, or don't want.

    Did you ask to be taxed more? No? Well, your politicians seem to be confused. Please set them straight.

    Remember, they are supposed to represent you. It's not as if the government should do whatever it wants to do and you have no say in the situation. It's only that way when you keep quiet.
  • Has anyone recently ordered a Lenovo laptop? I just bought a pretty sweet x61 and they charged me tax!

    I live in Arizona and any time I've ordered anything online (including Amazon), I've never been charged tax.

    Even with the tax, they were cheaper than everything else, but calling something "tax" when they are obviously not paying the taxman seems crappy to me.

    I wonder if anyone else has seen Lenovo do this in their state?
    • Re: (Score:2, Informative)

      by Kufat (563166)
      From Wikipedia:

      Arizona has a transaction privilege tax (TPT) that differs from a "true" sales tax in that the tax is levied on the gross receipts of the vendor and is not a liability of the consumer. (As explained in Arizona Administrative Code rule R15-5-2202, vendors are permitted to pass the amount of the tax on to the consumer, but remain the liable parties for the tax to the state.)

      And Lenovo does have an office in Phoenix, so...
  • Amazon is based in Seattle, so Washington state residents already have to pay the roughly 8% sales tax on Amazon goods. I've always wondered if it would be ever worth it to ship expensive items to an address of a friend outside of Washington, and then just have him ship it back. This would potentially work for small items.

    Since you already have to pay for goods shipped in from other states at traditional storefronts, it only makes sense to allow Amazon to be taxed.

    That said, I'm generally opposed to sales t
  • See also: State Taxation and Regulation: the Modern Law [justia.com]. Although it's not a gimme in this fascist dicatorship in which we now live, the Supreme Court has already established precedent that would overrule the state legislation.

    As it should. I, as an internet merchant, ship my products "FOB here", which means that from the moment the article is delivered to the carrier, it belongs to the buyer. The transaction legally happened here, not in New York. If New York can get away with an import tax, fine... not my problem.

  • We have a "destination tax" in Kansas. Anything we buy we're supposed to pay tax on, regardless of where it comes from. We're supposed to pay tax on online purchases when we do our taxes every year. If you make a mail order purchase from a company that has no existence in Kansas and is aware of Kansas destination tax, they will charge you Kansas sales tax based on your location, not theirs.

    Now, does anyone actually volunteer to pay those taxes? That's a different story...
  • Who think the Commerce Clause gives Congress exclusive and complete control over interstate commerce, read up on the Dormant Commerce Clause [findlaw.com]. Or if that's too dense, go to the Wikipedia article [wikipedia.org], although that's more confusing.
  • Collecting sales tax is horribly complicated. It's not just a simple percentage for each state. There have been some attempts to simplify it, but they have so far failed (to come up with something basically simple). Even if they did simplify things enough to have a known percentage for each state or zip code of delivery, what about electronic delivery (stuff you pay for then get to download)? I once suggested states be required to standardize tax rates based on zip code (or just one percentage for the w

  • by DigitalisAkujin (846133) on Saturday April 12, 2008 @03:55AM (#23044886) Homepage
    I fully expected this to eventually come about. There's a huge chunk of commerce in the US done through the Internet which drains a lot of possible Tax Revenue from the states when before people would just go to the local electronics store.

    I don't believe it's right to tax us this way however, nor do I think it's truly enforceable at this time since tax rates in various states are so complicated and if this actually passes it will be a big precedent for other states and local governments the follow suit, further complicating the situation.

    It will be interesting to watch this play out. Sadly, the American people are gonna have to start paying taxes from somewhere. We have a huge debt and a lot of immediate things the government simply needs to take care of.
    • Re: (Score:3, Insightful)

      by hacker (14635)

      We have a huge debt and a lot of immediate things the government simply needs to take care of.

      Do you honestly believe, even for a moment, that one cent of this additional revenue will go towards debt?

      No, it will go to fund new programs, which will then incur even more debt, of course. It will pad and line the pockets of industries that do not exist yet, further complicating the problem.

  • Thanks to the housing bubble bursting, states are facing severe budget problems. Expect to see all sorts of ways to tax come out of the woodwork.
  • If you live close enough to make it economical, get a mailbox out of state.

  • I'm confused: All this outrage, but not one "Yeah, so?"

    I've lived in both Virginia and Massachusetts - certainly opposite states with respect to economic policy. At the dawn of the Internet, buying things online was a great way to avoid sales tax. But over the years, more and more companies had to collect sales tax from me; I can't remember the last time I bought something online and paid no tax.

    I thought I remembered this exact controversy happening, nationwide, a few years back; online retailers were go

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