Amazon Fights Back Against NY Online Sales Tax 254
The New York Times is reporting on Amazon's lawsuit contesting the recently enacted New York state law which requires online retail outlets to collect sales tax on items sold to the state's residents. Amazon disagrees that it should be required to collect such tax without a physical presence in the state. We discussed the 'Amazon Tax' last month. Quoting:
"The new law is based on a novel definition of what constitutes a presence in the state: It includes any Web site based in the state that earns a referral fee for sending customers to an online retailer. Amazon has hundreds of thousands of affiliates--from big publishers to tiny blogs--that feature links to its products. It says thousands of those have given an address in New York State, although it does not verify the addresses. The state law says that if even one of those affiliates is in New York, Amazon must collect sales tax on everything sold in the state, even if it is not sold through the affiliate."
Re:The Free Ride is coming to an End (Score:2, Informative)
Re:The Free Ride is coming to an End (Score:2, Informative)
Yes, I live in NC and yes, I benefit from the things that are built with state tax money. This "should" language you keep using is anathema to me, though. What should happen is that they don't take money from me except for what I elect to do. Yes, they have the authority to do it otherwise, but not robbing me for things I don't use is the should.
Greed is wanting more when you have enough; I grant that this is subjective, but "enough" is not determined by well-intentioned tax assessors. Keeping what is already mine is not greed, my friend. That you (and others) have accepted that way of thinking is why the only solid economic progress happens in spite of you
Re:NY Could Sue For Buyer's Addresses (Score:3, Informative)
Yes, you do have to keep track of all purchases you made that you didn't pay sales tax on, in particular because the transaction occurred outside the state.
From New York State Resident Income Tax Return IT-150 & IT-201 Instructions [state.ny.us] (Page 66)
When do you owe New York State and local sales or use tax?
When you make a purchase of taxable property or services from a seller (vendor) located in New York State and take delivery in New York State, the vendor should collect state and local sales or use tax due and forward it to the Tax Department. However, you are responsible for paying the tax directly to the Tax Department under the following three circumstances: Deliveries into New York State -- You owe state and local sales or use tax if you:
Purchases outside New York State with subsequent use in New York State -- You may also owe state and local sales or use tax if you are a resident of New York State at the time you purchase any of the following outside New York State:
(You may be eligible for a credit for sales or use tax paid to another state. See Instructions for Worksheets 1, 2, and 3, Column D, on page 70.)
However, you are not required to pay state or local sales or use tax on any property or service that you bring into New York State which you purchased outside of the state before you became a resident of New York State.
Re:I wonder if... (Score:3, Informative)
That is not the issue. If a NY resident buys something they are subject to NY tax, no matter where they bought it or how it was shipped to them, by truck or by wire. The sale takes place wherever the buyer lives.
What NY wants to do is to force Amazon and others to be their tax collector, just as they do with stores physically in NY. The US Supreme Court has ruled that a seller has to be PHYSICALLY located in the state that wishes that seller to become a tax collector for that state.
Amazon and others not in NY can safely ignore NY on this issue. There is no way NY can enforce this without Federal help, either Congress or the Federal Courts. NY would have to file suit in Federal Court to try to enforce their law. Good luck on that.
Re:I wonder if... (Score:3, Informative)
Not strictly true. The sales tax is determined by residency and state law. When I, as an Oregonian, go buy something in either CA or WA, I don't have to pay their sales taxes, since we don't have sales taxes here. In WA they make it easier than CA. In WA I can just show the merchant my Oregon ID, proving I am indeed and Oregon resident. The merchant will make note of that ID and not charge the WA sales tax. It obviously make sense to do this only for bigger purchases.
In CA they require a special notarized form stating that said object, usually a vehicle, will not be registered or used in CA but will be taken to OR, where it will remain for at least two years. It's generally not worth the hassle for lower cost items. Relatives of mine just went through this when they bought a fancy horse trailer in CA.
In the NY case, NY residents are obligated to pay the sales tax, for which use tax is just another name. Amazon however is not obligated to collect this tax from their NY customers, unless Amazon has a branch (physical presence) in NY.
This is nothing new. The SCOTUS has addressed this long ago, in the days of mail order. What is new, is that NY claims that a New York resident making a website with a sales link to Amazon constitutes a physical presence, obligating Amazon to become a tax collector for NY. This will have to be resolved in a Federal Court. I don't think NY will get very far with this, but it is an imaginative try for them to grab some extra cash.