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New York Goes Gangsta With Tax Law

Makes sellers offer they can't refuse

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Online retailers doing business in New York will be required to register with the state beginning June 1, 2008 to collect taxes, or face audits for prior quarters for failing to register.

 

 

Amazon.com is suing the New York State Department of Taxation and Finance (DTF) over a new state law that requires Internet retailers to collect sales tax on purchases shipped to state residents.

Amazon has argued that since it does not have a physical presence in the state that it should not be required to collect taxes on shipments going to New York. "Amazon has no physical presence in New York," according to the suit. "It does not own, lease, or otherwise occupy any physical property in the state, and none of its employees works or resides in the state."

In addition Amazon says the New York law is unconstitutional based on a 1992 U.S. Supreme Court ruling that claims states are prohibited from requiring out of state retailers to collect sales tax unless the company has a physical presence in the state.

In the Quill v. North Dakota case, the Supreme Court re-established the rule that a state could not impose sales tax collection on a business unless the company had employees or property in the state.

New York defends the law by arguing that the Amazon Associates program, which allows Web site publishers to receive commissions by promoting Amazon items through their sites make Amazon liable to collect taxes on its behalf for those affiliates who live in New York.

One piece of bright news for Amazon and other online retailers is that the state of New York is not seeking back taxes. Tom Bergin, a spokesman for the state Department of Taxation and Finance told WebProNews,"The legislation provides for a limited amnesty for online sellers who register as sales tax vendors and start collecting taxes by June 1, 2008."

"If the seller registers and starts collecting sales tax by June 1, the seller will not be liable for tax not collected for sales tax quarters prior to June 1. Conversely, if you don’t register and it is later determined that you should have, you could be subject to tax dept audit for quarters prior to June 1."

Brick and mortar companies are generally supportive of the "Amazon Tax," saying it levels the playing field by forcing online retailers to collect state sales tax. The down side is that it could potentially mean fewer sales for online retailers.

The choice between paying $100 for an item or $108 would definitely affect the sales of other online merchants besides Amazon. In an increasingly uncertain economy the consumer cannot afford frivolous spending.

If the New York law is upheld, you can be sure a whole host of other states will follow its example and implement similar laws. The New York law is projected to generate $50 million in revenue this year and $73 million next year–an amount that any cash-strapped state would be happy to collect.

 

 

New York Goes Gangsta With Tax Law
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  • Charles Flaum

    What is not stated in this article is that New York State has over 50 different sales tax rates – 1 for every county – and some counties have up to 5 separate tax rates. 

    This will definitely be taken to the supreme court as overly burdensome to all but the largest online retailers.

    Let’s all yell – "Screw you New York State Tax Man!!"

    • Guest

      NYS lawmakers are such a bunch of whores. Oh, wait, no, that’s wrong, at least a with a whore you get something for your money, and comparing the two is just an insult to a girl trying to make a living. Cockroaches, that’s more like it.

  • Guest

    I thought New laws only took affect from the time they passed onwards. This law is taling about online retailers owing back tax that was never collected in the first place, because it wasn’t required. And then the scare tactic of If you comply we won’t worry about the back taxes you now suddenly owe us. What is the difference with this or New York deciding that they are retro activly adding a new tax to something that was tax exempt (like food in many places) and telling all the grocey stores we want the new tax paid retro active to 2000 (pick any year).

  • Pete Davis

    Just another case of greed. I don’t believe there is any provision in our State law that requires me to comply with New York auditors. If they win we just won’t sell in New York. It will hurt New Yorkers the most.

  • Guest

    In a time when people can’t even afford gas to drive their cars to work, people losing their homes because they can’t afford to pay the mortgage - and the ungodly cost of healthcare – New York now wants to suck more money out of us.  When will it end?  And the question I’m most afraid of – what’s next?!!  Screw New York – the city that never sleeps should go take a nap and leave us all alone.

  • John Henk

    NY has the highest paid goverment officials in the country  and very probably the biggest pork barrel spending of any state. NYS government has to be stopped spending the taxpayers money and padding the goverment representatives bank accounts from their part time jobs.. Our services are no better than other states. I can’t believe the residents of this state have put up with this for so long. To now try to tax people doing business  out of this state is the same mob tactics the gangsters use here in good old NY  They are looking quite a bit alike these days. People here keep wondering why business  is moving out of state. Pretty soon, no one will do business WITH this state, with all it’s restrictions and taxes. Wake up people, we have to stop this out of control government spending. Cheers to Amazon.com for sticking right back to this greedy,bloated, pork barrel spending, prostitute patronizing, (not that that is bad unless my money also pays for that), repressive, corrupt, lying,…. government. Hopefully more big vendors will have the stones to just say NO to NYS.

  • http://www.halloween-mask.com Online, self made, and mad as hell

    I will cut off all of New York before I comply.

    Once NY starts their online plunder, other states will jump on the gluttony bandwagon. No thanks.

    This has to be stopped before it gets started, and I am glad New Yrok chose to take on an online giant that can afford to fight back, rather than some small company that gets squashed. ("Precendent set, let the tax money roll in!")

    If you can see the site I used as my hompage, it is one of hundreds. If this ill-thought, commerce-damaging piece of political vandalism goes through, I will NOT sell a damn thing to anyone in New York state.

    Screw you NY tax man, I hope you hear from a never ending stream of really angry people!!!  And I will be on the front lines making that happen for you.

    My shopping cart will state that my company no longer does business with NY state residents, and will include a phone number and email

  • Joseph Lopez

    Well, for those of us who are located outside the USA and have online stores that ship to New York, then what?

    I suspect that we are in for a nice windfall if this Tax is imposed because we will not only out compete New York Retailer s but will kick the pants off all USA retailers.

    If we don’t pay this tax, what is New York going to do to us?  What is their jurisdication against us?  Fuhgettaboutit!

    So basically, New York will cut off it’s nose to spite it’s face and the rest of the USA will follow while we in the business diaspora catch the money falling from the competition tree. Cha-Ching!

    WHAT’S NEXT?   $ 4.00 GAS?  Opps!  Geez us, what happened to America’s ablility to compete?  Where has th e leadership gone?

     

     

    • Guest

      This tax law is just another reason why companies continue to move their business out of the country.  People commonly blame the companies but the blame should be directed straight at the source, the corrupt and stupid lawmakers.

  • C M

    This is a cheap shot. If NY wants their sales tax from their citizens who purchase things out-of-state and online, they need to do their jobs and educate their citizens to pay up. In WA state, legally all citizens are supposed to pay the State any unpaid sales tax on purchases online or out-of-state. I don’t know if the same is true everywhere else. Having said that, WA state DOR never actually enforces that rule on anyone other than businesses within the state. So here NY is trying to do the impossible task by requiring the online businesses to do what NY’s DOR could not do themselves. 

    I like the thought of online businesses completely boycotting NY entirely! Just don’t ship there. Then maybe the citizens will arise and get the NY government to wake up and put their taxpayer’s money to better use.

  • Guest

    IT’S THIS KIND OF THING THAT PUTS THE SMALL RETAILERS OUT OF BUSINESS

  • Guest

    This article was a little unclear, making it sound like every online retailer will have to register.  That is not true.  The key is that Amazon has an affiliate program, where they pay people a commission for referrals to their site.  Since some of their affiliates are in New York, the state is making a case that they have a presence in New York—even though they themselves are not physically there.  This would be a verrrry broad definition of ‘presence’.  The little guys don’t have to worry if they have no office, store, etc. in New York

    • Guest

      This response has been posted before…who is this posting this?  Is this some New York legislative assistant trying to quell the burning outrage of the community at large.

      You are probably trying to make us ambivalent so nobody does anything….

       

      • Guest

        Yeah great, so let’s NOT tell people that this may not apply to them. Brilliant idea.  Let them go ahead and register and pay taxes to New York when they don’t have to.  Isn’t that just as unfair? 

        I was stating simple fact.  Does not mean I am not outraged by what’s going on.  Gee, why would I care…the beginnings of potentially losing my whole livelihood and all.

  • http://www.dvdknight.com Nick

    I’m simply not going to do business in New York, or any other state where I would have to pay sales tax other than my own state of California. Until this is resolved, or until June 1 I’ll continue to do business everywhere, but if this goes into affect I will not sell or ship to any customer in New York. You voted for them, you have to take the heat!

  • http://kungfucopywriter.com Stuart

    I live overseas, am not an American and now NY think I must become a tax collection agent for them. Sorry, but that won’t happen… And how can they legally backdate a tax law to a time that they see fit?

    Oh – silly me, they make the laws and need a little extra cash to finace their profligate money-wasting habits.

    But the worrying thing is that if this law goes through then the cost of anyone doing business online will go up, there are many mom and pop businesses who will suddenly be forced to become tax collecters. The extra burden on them will force many out of business especially when other states jump on the bandwagon as they surely will.

    What do we have to do stop this nonsense?

  • http://kickasswebdesign.com bj

    I did business in NYC for a lot of years, as well as in other states, and had a tax number and reported quarterly in each. Without a doubt, the NY State Taxation Bureau makes the IRS look like pussycats. They consistently "corrected" my numbers to try to get me to pay them (a considerable percentage) more, but my (excellent) accountant sent them backup docs and told them to take a hike.

    A friend who moved out of NY State told me that his Accountant advised him to sell his grave plot since NY State would use its existence to prove he was still a resident and subject to NY taxation.

    And yes, I will for sure stop doing business with New York State Residents if this Draconian Tax Grab goes forward.

  • Guest

    Well said everyone.  We will just stop doing business in NY if we have to collect sales tax for NY.  Imagine if every state would do that.  Not only are there such varied tax rates across states, counties, localities, there is also a big difference in what is taxed.  Some states like NJ don’t tax clothing, many others do. 

    This would be a nightmare.  I can’t imagine even finding an accountant that could fill out the 50 quarterly returns required if an online store had to file to every state.

    If states want the sales tax from small businesses internet sales, the simplest way is to treat the web store as a brick and mortar store.  All sales are taxed based on location of store owner.  Sure the state would lose sales tax from other internet sites that ship to their state, however they would gain by collecting tax on everyone in their state that ran an internet site and collected the sales tax for goods shipped out of state.

    I seem to remember there was some talk about this a few years ago where states were getting together to join together for a uniform sales tax for internet sales.  I haven’t heard much about it lately, but when I first looked into it, it was still very complicated.

     

  • Guest

    Come June 1 I won’t be selling to any NY addresses either. Not from my business and not from my private sales. If New Yorkers want my stuff they can get a PO in NJ, PA or Conn.

    • steve

      well my bro already gave me a credit card in his name (lives in new jersey)

      i shall be shipping my stuff there and do a monthly pick up of my stuff. have a nice day. i live in new york and i hate my state and representatives

  • Guest

    To the writer of this article,  I think you are confusing people & they are freaking out.  This does not apply to anyone unless they have an affilate advertising program or a legitimate physical presence in the state.  Here is a link to a CNN article:

    http://money.cnn.com/2008/05/02/technology/amazon_suit.ap/index.htm?postversion=2008050217

     

    • Corbin

      Sorry it just doesn’t matter this is illegal and the State of New York needs to quit trying to grab money where ever they can.  This is the beginning of the end for online retail if stuff like this passes.  

      Amazon already pays enough taxes to the federal and local state government where it operates why should it pay the states where it sells goods as well?  

      Tell me EXACTLY what the State of New York has done to deserve any of those transaction funds? 

       

       

  • Guest

    From CNN

    "The state Legislature and Gov. David Paterson passed the law as part of the 2008-2009 budget. It applies to companies that don’t have a brick-and-mortar presence in New York but have at least one person in the state who works as an online agent — basically someone who links to a Web site and receives commissions for related sales."

     

  • Guest

    They already TRIPLE tax workers in NY City:

    Besides the Federal and State Income Taxes they have a City income tax too.That alone is why my Dad an MD left Manhattan for Dallas TX.  And yes all it would do is encourage seller that are based in other countries to sell more in NY since they would be shielded from an out of control government that is streching the laws beyond sanity and the court agreed to being a Nexus.  As an online store we have to deal with suspicion of our sites, overcome resistiances of using an online cart unlike shopping in a physical store down the street.  That is their advantage and why they should support the States Tax collection agency.  Oh and why should Retailers in the FIRST PLACE even collect Taxes they dont owe but the customers do owe.  Get Real.In this 21st Century with the electoronic and onlin programming tax agancies could grab the tax when users in their state with registred bank account, there or Credit Card with theie physical address or billing address in NY State and note any online transactions that enter the Credit Card sysstem and see themselves it it is tacable and not and directly collect it from those would might benefit from the Sales Tax being even colleected.  We are not THEIR Hires or employees EITHER.  Let them Collect their OWN SALES TAXES and NOT US FOR THEM.

     

  • http://asylum-et.com/ Asylum

    This should be taken seriously. What is failed to be noticed is people will just stop buying online. This will NOT generate more income for NY but will rather cause an extreme setback and hurt everyone everywhere doing business online. An online website despite the location should be subject to pay taxes to the state the owner resides in or the website has registered a DBA or similar. Such as I am in VT and own a website and therefore it should be treated as a brick and motar in VT. If you come from NY to VT and buy a product you can gaurantee you will be paying VT sales tax. It makes no difference if you ask us to ship it to your home address in NY or if you bring it yourself. You being the consumer would pay VT tax and not NY tax.

    What next? You happen to be in VT when you visit our website so you have to pay 6% and then you live in NY and have it shipped to your home so now you pay NY tax as well? There is no more a chance of that than there is of NY’s recent desicions doing anything more than causing an online resession and what better time to pull this BS than when the country is hurting already. I now wonder if the folks that came up with this can get any brighter?

    As of today a notice has gone up on all of our websites where purchases can be made as with our clients websites that clearly states that any resident of NY is not permitted to make purchases from our website. Sorry NY residents but if you dislike this action take it up with your congressmen since there seems to be an incredible breakout of the greed virus.

    Before I go I must ask. Mail order has been around for many more years than the internet. Does NY get paid tax for mail order sales where the company is not in NY but the buyer is? I think not. So now what is the difference?

    • Guest

      THIS EXCERPT IS TAKEN DIRECTLY FROM THE TAXATION HANDBOOK FOR NY:

      please read this and get a grip! if you just ship stuff here via common postal carrier you do NOT pay NY taxes, etc!!!!!!!!!!!!!!!!!!!!!!

      Even though you are located outside of New York State, if you have
      customers in New York State, and you have sufficient connection with
      New York State, you may be required to register as a vendor for New
      York State and local sales tax purposes. For example, if you are located
      outside New York State, make sales of taxable products to persons
      within New York State, and regularly deliver the products in your trucks
      to your New York State customers, you have sufficient connection with
      New York State and must register as a vendor and collect and remit
      sales tax. Also, if you solicit sales of taxable products or services
      through employees, salespersons, independent agents, or service
      representatives located in New York State, you must register as a
      vendor for New York State sales tax purposes.
      If the only connection you have with New York State is the delivery of
      your products into the state by U.S. Postal Service or common carrier,
      you are not required to register or collect sales tax. Thus, some out-ofstate
      businesses (including some mail order companies) may not have
      sufficient connection with New York State to be required to collect and
      remit sales tax.
      Although, as an out of state business, you may not be required to collect
      sales tax from your customers in New York State, your customers are
      still responsible for the use tax on their purchases. The use tax
      complements the sales tax. An example of when use tax applies is when
      a New York State resident purchases taxable products or services
      outside of New York State and then brings them or has them brought
      into New York State for use here. For more information, see Publication
      774, Purchaser’s Obligations to Pay Sales and Use Taxes Directly to
      the Tax Department: Questions and Answers.

  • Guest

    If you operate a business in New York and you do business in New York, then you have an obligation to collect and submit tax for those sales.  It has nothing to do with Amazon as they are simply a method for conducting the sales, but the sales go through them, but they aren’t the seller.

    When I do sales in my state through eBay, they collect tax if the sale is made to someone in the state.  I don’t think they should be as the sale is between me and the buyer and it is my obligation to report the sales tax on MY sales tax number.

  • Guest

    The solution to this is to simply not ship anything to the State of New York.  Post a notice on your website:  " SORRY, WE DO NOT SHIP TO THE STATE OF NEW YORK".  Maybe the residents of New York will eventually have the guts to throw the greedy politican bastards out of office and fire their zealot bureaucrats.  If not, they can do without merchandise from out of state.  I will never collect any sales tax for any State other than my own.  I expect most vendors will do likewise.

    • MaBu

       Here! Here! I agree we just don’t ship to NY, maybe the residents will stand up to the greedy politicians and say "no more"…..

      • Guest

        I am a RESIDENT of NEW YORK and a small online BUSINESS OWNER in NEW YORK…

        I am very disturbed by this article and its misleading information! The NY department of taxation is trying to get Amazon and similar companies to sing up and pay these taxes because they have affiliate programs that include RESIDENTS of NEW YORK- so they ARE CONNECTED "taxation-ally" speaking to the state.

        General retailers from any other state that do NOT have these types of affiliate programs or locations/employees in the state of New York are not liable under this law….

        As a resident of NEW YORK I am VERY DISTURBED to see people ACTUALLY being stupid enough to state that they will not sell to me because I live here… you DO want business don’t you???

        We should all know by now how the MEDIA can really screw up a story… why are we not taking the time to review the truth of these facts from the proper places before flying off the handle??? When I read this article, that was the first thing I did- turn right around and look for the facts from the NY Dept of Taxation….

        Ok, getting down off my soap box for now…

        • Guest

          So you are a resident of NY.  My condolences.

          Aren’t these affiliates also residents of NY?  Under NY tax law aren’t they responsible for paying taxes on their income to the State of NY?  So your greedy state is just looking for another pocket to stick it’s hand in.  If these affiliates aren’t paying their taxes, that is a NY problem not an Amazon or any other retailer problem.  Affilates don’t make the sales so they can’t charge them sales tax on top of the income tax.  Suck it, that is how life works.

          You should be "DISTURBED" by the actions of your elected politicians and not fly off the handle and start calling people "STUPID".

          We do understand the issue just fine.  Your elected officials are greedy rat bastards and feel they are above the Supreme Court in their actions.  You have no balls, you put up with this crap from your own state, and whine when the business community says enough.

          What it comes down to is that if you visit my website and see a product I have reviewed or recommended and click my affiliate link and buy it, then you have created a transaction where the retailer will have to collect my state sales tax, AND if they happen to BE in your state, then they have to collect your state sales tax too???  What kind of craptastic logic is that?

          No one twisted this story, don’t blame the media or anyone else.  Blame yourself and your fellow new yorkers for this and deal with it.

          I will no longer sell to NY residents either.

  • dan

    Here in Indiana the resident is liable for reporting purchases made from other states on their State Income Tax form. The state tries to collect taxes owed from such purchases. I’m sure that only a small percentage of people actually claim anything purchased from out of state. New York should educated their own citizens and taxate them till there’s nothing left to tax. But leave me out I’m just a small town Joe in Indiana.

    What ever happened to "taxation without representation". It is one of rights as citizens of this Great Nation of Our’s ( I think??????)

  • Guest

    NY has no jurisdiction in my state they can KISS MY BUTT. I don’t know who they think they are but they won’t get any tax out of me so like I said the big rotten apple can KISS MY BUTT. After all we had a disclaimer on our site stating the buyer is reasonable for all taxes within their state.

  • Guest

    This article was a little unclear, making it sound like every online retailer will have to register.  That is not true.  The key is that Amazon has an affiliate program, where they pay people a commission for referrals to their site.  Since some of their affiliates are in New York, the state is making a case that they have a presence in New York—even though they themselves are not physically there.  This would be a verrrry broad definition of ‘presence’.  The little guys don’t have to worry if they have no office, store, etc. in New York.  I got this info from CNN.

    • Guest

      It doesn’t matter if it’s a little business or big business it’s unconstitutional for them to collect taxes if amazon has not brick or mortar presence or employees.    

      I got this info from the United States Supreme Court.

       

      • Guest

        This hasn’t gotten to the Supreme Court or any court yet.  This issue will be challenging current law.  However, I totally agree that it is greedy and sucks big time for those affected. 

        The size of the business was not the point.  Big or small, it doesn’t matter.  If you have 1 or 1,000,000 employees and you don’t have a physical presence and you don’t have an affiliate program with affiliates in NY, you will NOT BE AFFECTED BY THIS.  The little guys are the ones reading this and freaking out saying they are not going to do business in New York, and potentially losing sales and hurting themselves, when they probably will not even be affected. Just thought I’d try to point that out since this point was not emphasized in the article.  I had the same thoughts as most people posting here until I did some more googling.

        • Guest

          The supreme court has set a precedent on this case.  They said you had to have employees or a physical presence in the state to compel a corporation to pay taxes.  An affiliate program is NEITHER of those.   Sure it will go to court but a reasonable person would see that an affiliate person isn’t an employee of the company.  

          You SHOULD freak out today because this is how income tax started.  It was to be a temporary solution to solve a debt problem the government had.   They didn’t explicitly set a moratorium on it….and guess what the government got fatter and fatter and couldn’t ween itself off the income tax.  So it stuck.  

          People at the time probably thought….big deal an income tax.  I don’t make any money.  I’m a farmer it won’t affect me.  25 years later when they sold their farms they probably were kicking themselves for not caring.

           

      • Guest

        Maybe someone else can get their info from God and let us know what he says.

  • David M.

    I can envision New York’s next step will be to tax any sale that comes from even a temporary "presence" in the state.  For example, if a salesperson visits a prospect in New York and then eventually makes a sale to that prospect, will that sale be taxed because the salesperson was "present" in the state for a few hours?

    How about if you hand your business card to someone while attending a trade show in New York and that somehow turns into a sale?  Will all future sales that result from that meeting be taxed by New York state?

    What happens if a Texan and a Californian meet during a layover at JFK and the Texan eventually buys something from the Californian?  Maybe that should be taxed because both had a "presence" in New York that resulted in a business transaction.

  • Guest

    I think this is the pocket-filling thing if i have ever heard of one. Maybe if these politicians would stop being so crooked and stealing money from the taxes they get now this would not even be an issue. I live in NY in the town of Smithtown and property taxes have gone up so much but the roads and such are worse than ever I guess this goes to the $1 million toilet seat the town neads. This state is horribly if they would spend the money the correct way they would not need this stupid tax for the internet.

  • Guest

    Govt. is just the biggest gang in town. I say if they pull this then boycott NY….don’t do any business there at all. Then they’ll lose the related taxes generated by the se businesses form the people doing business with them.

     

    Also, anonomyze the sites.

  • Guest

    Fight organized crime!!! Abolish government!!

  • steve

    well my bro already gave me a credit card in his name (lives in new jersey)

    always has trusted me to pay anything back

    i shall be shipping my stuff there and do a monthly pick up of my stuff. have a nice day. i live in new york and i hate my state and representatives

    • http://www.libertyordeath.com Chance Haywood

       As a resident of NY you are still required to pay a tax on goods purchased outside of NY. 

      • steve

        wrong. im using my brothers card lives in new jersey shipping to a new jersey address.  wrong!!!!!!!!!ok if my brother buys the stuff for me in new jersey gives it to me whats wrong with that?

        • Guest

          so your brother’s going to be the one liable for NJ tax.

  • Guest

     Have you ever thought about how much money of a dollar is left after it’s changed hands a few times?

    For example I buy something from a store and their profit is 1 dollar.  They take that dollar and pay and employee.  He gets taxed @ 20% leaving 80 cents.  He then takes that 80 cents and then spends it on something.  80-5 cents (6.25% sales tax) and now it’s down to 75 cents.  The new company pays their employee and now it’s only 60 cents after the employee pays their income taxes. (15 cents for 20% income tax rate)

    And the cycle goes on and on.  This doesn’t even include the amount of taxes incurred if you buy something like gasoline which has many more taxes associated with it.

     

     

     

  • http://throwallthebumsout.org FedUp389

    (In the interest of full disclosure)  As a fledgling web entrepreneur, I have very little to lose.  (You need sales to worry about taxes.)

    I will decline any business originating from New York State as I refuse to to aid and abet the strong arm tactics of the NYS Department of Taxation. 

    Like the Gotti reference in the reference article, NYS wants to become a "silent partner".

    I understand most small, "Mom and Pop" operations can not afford to fight the tax man; so bravo to Amazon. I can only hope their pockets are deep enough to stop this government sactioned "vigorish".

    • Guest

      Do you have an affiliate advertising program with affiliates in New York?  An office or store in New York?  If not, then you do not need to collect NY Sales Tax.  This article is very misleading.

      • Guest

        This is ridiculous….who are you?   You must be working for NY STATE.

        You keep saying don’t worry about this–it won’t affect you because you don’t have an affiliate program.

        That isn’t the point the point is that NY is strong arming businesses that DO use affiliate programs to charge sales tax even though the US Supreme Court says it’s unconstitutional!

        Furthermore if nobody cares because it doesn’t affect them this is how very BAD things happen.  Just look at Nazi Germany and how the country was taken over by them because it wasn’t affecting the average citizen.

         I’m sorry but EVERYONE should care when stuff like this happens…. today it’s affiliate programs tomorrow it’s something a bit more wide reaching.  

        Keep your grubby government mits off of our money.

        • Guest

          NO–I LIVE NOWHERE NEAR NEW YORK AND I HAVE NO GRUBBY MITS.  I wash my hands quite frequently, thank you.  I’m an internet retailer who cares about this very much.  Why do you think saying " this may not apply" to some people means I’m saying "no one should care".  You are clearly reading a lot into what I am saying.  Apparently you don’t mind if people unnecessarily REGISTER AND PAY TAXES TO NEW YORK BECAUSE THEY THINK EVERYONE HAS TO DO THIS by June 1st. You don’t like what I’m saying so I guess you WANT New York to get more taxes of which they are not deserving.  Or you don’t mind if fellow internet retailers take action and lose business because of this poorly written article on webpronews.  Don’t tell me I don’t have an important point.  This is an IMMEDIATE concern—as in 3 1/2 weeks from now. 

          Other than your personal insults and misinterpretation of my comments, I agree with EVERYTHING you are saying about the issue at hand.  So take that–ha!

           

    • Guest

      Amen!

  • Guest

    Anyone who has run a moderately large business in New York State knows it has four branches of government:  the Executive, the Legislative, the Judicial, and the Mafia.

    Very perceptive of you, Mike.  Best wishes for your knees.

    Thank goodness that the authority of New York’s official thugs stops at the state lines.

  • http://www.SanDiegoPreviews.com Roberta Murphy

    Perhaps small retailers can find a way to block New York IP addresses from their sites?

    Talk about an ill-conceived idea….

    • Guest

      Do you have an affiliate advertising program with affiliates in New York?  An office or store in New York?  If not, then you do not need to collect NY Sales Tax.  This article is very misleading.

      • Guest

        It doesn’t matter if you have an affiliate program or not.  The idea that you have to pay taxes just because you have one is flawed.  The state should abide by the supreme court’s decision that if you don’t have employees or brick and mortar presence in NY you shouldn’t have to collect taxes for the state.  That is their job to do for their citizens–it’s New York’s job and they already do try to collect those taxes.  Why mess it up and say if you have an affiliate program you have to collect it now?

        A lot of companies use affiliate programs right now. It’s an advertising model.  What if NY said if you show ads on the TV in New York you have to collect sales tax?  Would that be fair as well????

         

         

        • Guest

          I’m not saying it’s fair to people with affiliate programs..and it is probably the door opening to something much, much worse for all of us. The idea that an affiliate is a "presence in the state’ is a wild strech of the imagination. I wholeheartedly agree that it’s wrong and needs to be STOPPED.  But the people who are rushing around trying to figure out how to pay taxes to New York by the first of June need to know that this may not apply to them…don’t ya think???

  • Guest

    If Amazon pays tax for a sale in there state they have brick moter in, than why not pay in the other states they sell in.  I’m in wholsale sales with 5 states and hundreds of cities in our sales area.  We have brick and moter in only one state.  We have to pay taxes to all the states, also all the different city sales taxes.  A bookepers night mare.  Why should we pay and not our internet compition!  We also have our coustomers using our website.  Better yet make it fair "FLAT TAX" with no corperate, farm and churchs exemptions.

     

    • Guest

      Why are you paying taxes in states other than your own?  Doesn’t sound right to me.

      • Guest

        I sell toilets and furnaces in ND, SD, MN, IA,&NB with stores near the borders.  There are more people in NYC than all 5 states combined, that why we have a accounts in others states.  I sell for a $1.05, or $1.055, they sell for $1.00.  We both send UPS.  Just not fare any way you look at it.  If we have to pay a tax let’s all pay the same.  The dividing up process is really fun.  Not to forget the extra stamps, paper and time.

        • Guest

          You mentioned that you sell wholesale.  I’m a retailer (in only one state) that buys products from wholesalers all over the country.  They have never had to collect any tax from me as long as they have a copy of my resale license.  I guess I’m not understanding how it could be that you need to pay all those taxes.   I’m sure you’ve checked with an accountant and obviously know your situation better than I would.

  • Guest

    IT IS NOT THAT ALL NYC SALES will be taxable.  This article was written for shock value and it worked!

    If you read the other article, is it different than the way it comes off.  Businesses are liable for taxinv only if they have an affiliate or employee in NYC.  Basically, people will have to re-org their affiliate programs and call it freelance sales, or something other than am affiliate to get out of it.

    At the end of the day, it still sucks, and it will make it more difficult to run a stinking small business.  As if we do not have enough to worry about!  Jackholes!!!

     

    • Guest

      Thank you!  This is confirming some of the things I have posted below.  I think this was a really crummy, misleading article.  I think the writer of the article needs to clarify what he has written.  He is causing harm to people who are planning to alter their business plans because they think that this tax will apply to every single business that ships to NY.

    • Guest

      NOT NYC.  New York State — All of the state.

  • Debb

    This is easy to fix. I’ll just not to sell to NY……

  • Guest

    Go Amazon! 

    I realize we need taxes, but I don’t waste my money, why should they?

    F.Y.I.  I’m being audited because of an accountant who pushed the limits.  Ugh.  They’re trying to disclaim every single deduction for business purposes and I have my own business.  Our government needs a huge overhaul!

  • Hughze

    New York is responsible for collecting it’s own taxes from the associates not Amazon.  If the associates are based in New York and are required to pay taxes to the state of New York, then New York needs to be bothering them not Amazon. 

    People remember, If you are taxed by a govenment that has no governing presence over you, that is ‘Taxation Without Representation’. In other words in order for New York to be able to tax you, You would basically have to be a resident of the state of New York. (That’s a little tough to be when you live or your business resides in another state.)

  • http://www.gruntagency.com Don Forrester

    A lot of people are saying, ‘Oh, it’s only on affiliates in New York.’ 

    But that’s how business is done online, people.  ‘Affiliates’ means ‘Advertisers.’  People that advertise for you on THEIR website.

    Now you the business are supposed to keep track of where affiliates live and pay New York, even if both you and your customer live in, say, Florida.

    That is RIDICULOUS.  If the State of New York wants to tax its citizens, fine, tax them.  But don’t come to me and ask me to tax them for you.  That’s way too close to taxing me directly.

    I WILL continue to do business in NY… and I’ll pay.  But chances are that I’ll have a lot more affiliates in other states than I will in NY, simply because of the economics of it.

    That one international guy is right–this doesn’t affect international websites at all.  New York can’t tax them, can’t request their records, and had BETTER NOT try to block them.  It only downgrades the competitiveness of the U.S. based companies, and prevents U.S. based people from turning a profit.  Especially in NY.

  • http://www.clydesight.com Justin W.

    I appreciate the article posted as a warning about the new tax law in New York and Amazon’s suit.

    However, I would appreciate it even more if the author or the editors would post a follow up article explaining this law in more detail. The New York Tax Web site is very confusing on the matter.

    For example, how would they implement such a law, especially for small vendors?

    Does the law cover "soft goods", those which have no tangible nature (such as independent software downloads, e-books, MP3 music file sales, subscriptions to newsletters, even Tarot card and psychic readings over the phone or the Internet?)

    Does the law cover services of an intangible nature, such as marketing services, press release and other writing services, web design services and so on?

    The article and the New York Tax Web site don’t define the scope of the new law.

    Even the problem with affiliates is vague and unexplained. Many affiliate programs allow a vendor to accept an affiliate based on their Web site, not their location. How would one know without researching them in "Who Is" to see if they are based in New York? Shouldn’t the affiliates be required to submit this information, and shouldn’t the affiliate be the one responsible for doing the business in New York? If I understand it correctly, the law would require the affiliate to register, and the vendor to register, and then both would have to pay a state tax. This would amount to double jeopardy, wouldn’t it?

    I don’t see how the State of New York can implement this law except to a chosen few (such as Amazon) because they would spend all their time (and revenue) trying to catch those whom they feel should be taxed, and thus would make no money in the end, in fact it would cost them more than they would make.

    It does seem very much like taxation without representation. If the vendor must collect and pay sales tax to the state, should not the vendor be able to vote in that state’s elections, since the vendor is contributing to the welfare of the state? Taxes pay for a lot of services, which an out of state vendor would not be able to use, upkeep of roads, emergency services, schools, etc. Shouldn’t such a vendor be given a "discount" since the vendor can never avail of the benefit from the taxes?

    Perhaps I don’t understand this issue clearly enough, but it seems very confusing.

    A follow up article explaining all this (assuming someone, somewhere has a plan and a set of rules) would be very helpful to readers of this newsletter. Please do follow up on this.

    Thanks

  • http://www.bottomlinebudget.com Michael Reichwein

    “Online retailers doing business in New York will be required to register with the state beginning June 1, 2008 to collect taxes or face audits for prior quarters for failing to register.”

     

    I can see the banner being ready for website postings across the internet.

     

    New York residence need not bother to buy!”

     

    This tax law is not a means by which to enact fair taxation; rather a strong-arm tactic to collect desperately needed revenue. The New York State Department of Taxation and Finance should first learn to manage the money they have before demanding by point of law (a law they made), more taxes. Like a snowball rolling down the hill; what is next?

     

    If I live and operate an online retail company in New Jersey and someone who resides in New York, buys my product. I am not under legal obligation to collect taxes by reason that I do not live in New York. The Wal-mart stores in New Jersey do not ask for identification in order to collect out-of-state retail taxes. This is not a fare tax to be collected.

     

  • Guest

    This is how I see it.  Our economy is doing terrible.  The states are out of money.  We are at war.  Internet retailers, including myself, have benefited from not having to pay taxes for out of state purchases.  When in reality our website is the storefront in every city, in every house, and in every business.  Sooner or later the government will have to change the rule and work out a simple way to pay taxes to one organization, that will then split the correct taxes up between every state.  YES i am saying every state should be collecting taxes.  The Internet industry is a BILLION BILLION BILLION $$$ industry and we would notice a immediate spike in revenue.  When the government makes more money then our personal taxes decrease. as in the past has shown.

    • http://www.dkfriedman.com Donna Friedman

      It seems to me that this new law is unenforceable.  Can you imagine the man-hours it would take to moniter all the internet sales to buyers in New York?  WOW! 

    • Guest

      You are insane. 

    • Guest

      Nancy Pelosi (Speaker of the House) has a private gas guzzling jet she does not need…paid for by taxpayer dollars.  I know my home state has spent hundreds of thousands of our tax dollars on a tea pot museum (NOT KIDDING).  When this kind of crap stops and they have put the money to good use…THEN they can ask me for more tax money if they need it.  The wasteful spending is SICKENING.  The government does not need more money until they have taken a few tips from Wal-Mart.  Not that Wal-Mart is perfect by any means…but have you seen their corporate offices? The executives are basically using lawn furniture in their offices. They know how to stretch a buck. Our politicians, who are elected public SERVANTS should be ASHAMED.   I am disgusted by most all of them.

  • http://www.reelectnoone.com Paul Kruger

    Yesterday I sent an email to Jeff Bezos suggesting he temporarily disable the ability of New York residents to purchase on Amazon.com.  The thought is to enlist NY Citizens in an outcry against their own government for limiting their online shopping abilities. 

    This troubles me not just because it is a greedy grab aimed at a particular business ( failes equal protection clause ) but that, because of my business as a web developer, ( http://www.stuffdone.com )this could kill ecommerce for any but the largest businesses in the country.  Effectivly that would kill much of my own business and run me into bankruptcy.  Small and home based ecommerce would shut down in face of having to manage sales tax for 50 states.

    Another point, I am sure NY is like Florida in that if you buy something from out of state you are still legally liable for the sales tax on that item. You are suppose to report the purchase and send the tax to the State. If this is the case, NY already has a law to collect the taxes but are just too lazy to make any effort at all to keep their own citizens honest, favoring the bully approach to try to force someone else to do their work for them. Some one not even in their jurisdiction.

     

  • http://www.kncmowers.com Guest

    I don’ t think it really matters if a "commissioned affiliate" lives in NY or not. I don’t believe anyone who signs up for Amazons affiliate program automatically makes them an Amazon employee… does it?

    For those of you with affiliate programs I am sure you (like I) have filled out paperwork indicating your business size (ie # of employees & finacials) I’m willing to bet you never would have thought that an online "affiliate" would be considered one of your employees. With this in mind, I have to agree that this is NY’s way of getting there foot in the door for something bigger if they are suscessfull.

    I have no affiliates (to my knowledge) in NY so this would not effect me … yet but I think it’s BIG BULL and hopefully it’s thrown out.

    I support Amazon and am glad they have taken a firm stance, hopefully us "small business’s getting riled up over nothing" is a statement to each of our local governments who you can bet are also watching this scenario very closely.

    "It’s too late when it DOES actually effect you, be proactive and get off that it doesn’t effect me soapbox".

    • http://www.stuffdone.com Paul again

      Perhaps the simple solution is for Amazon to contract with CJ.com and not manage it’s own affiliate program, leaving those affiliate members signing with CJ and not with Amazon.

       

      What if some web site ( Google ) has a link to my site and someone in New York clicks the link and buys from me. Do I have to pay tax to New York.  Consider "sponsored ads" on Google.  Does Google have to collect and pay the tax because they posted my paid ad?  How does New York know?

       

      Will search engines be next, having to track sales as a result of paid ads and collect sales taxes?  Is my paid ad on Google any different than Amazon’s paid ad ( affiliate banner ) on my site?

       

      What would happen to the internet if this one law was allowed to stand and the other states decide to jump on the band wagon?  Will all ecommerc move out of the US and sell only Chinese products online?

      This is something the US Congress needs to address soon to prevent yet another economic crash brought about by one greedy, short sighted state legislature.

       

    • Guest

      I agree with all of your statements, but I think you are misinterpreting what the other people have said (me included) about small businesses getting riled up over nothing.  Obviously no one wants the state of NY to win. However, I think it is important that small or large businesses that this does NOT affect need to understand that they do not need to cut out New York & lose business if this law doesn’t affect them (unless they just want to protest)…or WORSE YET, REGISTER AND START PAYING TAXES TO NEW YORK WHEN THEY DO NOT HAVE TO.  People are not getting the point…just read these comments.  It is irresponsible not to say anything when so many people are misled, so call it a soap box if you want.

      • Guest

        I completely understand what you said, and are saying. But wanted to stress that just because this may not effect ME, doesn’t mean I should sit idly and wait for something else perhaps later that DOES effect me, and the rest of us this currently would not effect.

        This, simply put could be the start of a scenario where we give an inch enabling them to later on take a mile. I just think the more who are involved and voicing there distaste for what is going on now, helps prevent other states from thinking maybe they ca take NY’s idea and "improve" it, before you know it we’re all paying internet taxes to every state etc., etc.

        I will admit this may be far fetched, but then again… a year ago I would of laughed at you if you told me NY was going to do this too. I’m all for nipping it in the beginning when it doesn’t effect me, my business, or my finances rather then one day wake up and find myself in a position where I am defending my right to conduct business as I have always.

         

        • Guest

          I don’t think it’s farfetched AT ALL.  We need to squash this. 

  • http://www.stuffdone.com Paul Kruger

    Amazon isn’t alone in this. 

    What about eBay? 

    What about www.cj.com and the other companies signing up affiliate programs? How will they manage their tracking to know who’s affiliate’s live in New York and send that info back to the site owners etc.

    • http://stores.ebay.com/Hughze-Beez Hughze

      Ebay opposes the Streamlined sales tax project.  I haven’t heard any comments either from eBay about the New York tax collection.

      Not yet any way.

  • mysweetvictory

    What if all States decided that they were going to do what NY is unethically propoposing?  Those of us who do business online through affiliate programs would be unethically TAXED TO OR HEADS.  I back Amazon, Internet Speedway and any such company who will fight against such an unscrupulous move.  In a world of competition there is no such thing as a level playing field…be real

  • Guest

    NO TAXATION WITHOUT REPRESENTATION!

    • Guest

      Sounds like you are for the terrorists.  All hail King George II!

  • http://www.pencraft.biz Guest

    NY state like most of the states, including my home state of Idaho either have already adopted this statute or are in the process of adopting it.  NY is the ONLY one to that has modified the law to include affiliates.  However, should NY prevail, the model will quickly be ameneded.

    In Idaho, the law is enacted in such a way as to define a presence by interent to be by a) an owner living in the state b) a web server physically residing in the state c) delivery by any shipping agent to an address inside the state. If you meet this criteria the business is required to collect sales tax from ALL sales unless the buyer can provide a tax exempt certificate from their home state.

    Yes, it is a horrible muddled up government mess.  And it is going to get far worse before it gets better.

    • Hughze

      The way your state is doing it is the way it should be done.  It’s legal and constitutional. It’s an indirect tax imposed by your state on your resident businesses.

      New York seem to be trying to impose taxes on non resident businesses. Yeah I know, they say they are taxing the resident affiliates, but by making nonresident businesses collect the affiliate taxes, they are indeed taxing the nonresident business. 

  • http://www.reelectnoone.com reelectnoone.com

    It’s not the liberals…it is greed on one hand and a bad economy caused by……ta-da ! ….Big Daddy Bush and his $6 trillion dollar war to steal oil for Big Oil Companie Buddies.

    The bad economic situation ( Remember Bill Clinton,democrat, left us with a big surplus in the bank ) caused by the Bush Administration, put states and cities in a financial crunch too, forcing them to do stupid things go avoid going down with the ship.

    This law is stupid. Many etailers may simply disable NY as an option for selling. This puts no money in NY’s banks AND removes more options from NY’s citizens.

    As a web developer this could also put me under in Florida if I can no longer sell ecommerce web sites.  No one can afford to track 50+ jurisdictions and pay them all sales taxes.

    I think some stupid politician in NY is trying to destroy ecommerce for all but the very large wealthy companies. 

    If it were liberals they would be doing something to support the small business instead of squash them in favor of BIG business.  No this smacks of a republican type thing. They cut taxes for wealthy and keep us little guys under the tax gun instead.

  • http://www.stuffdone.com PAUL KRUGER

    It is time to start a campaign to have everyone who reads this post, contact everyone they know and everyone call, fax or write your reps in Washington NOW ! 

    Ask them to respond to NY’s non-sense with Federal Law clearly stating that state’s cannot impose tax collection duties outside of their own physical boundaries except where the seller has a physical presence in that state AND DEFINE physical presence to exclude individuals who are not on the seller’s actual payroll. i.e. affiliate banners etc.

    Absent such protections, one state ( NY ) could destroy ecommerce for us all, forcing such business off US soil to avoid this taxation mess. No state has any tax jurisdiction on another nation.

    This is already the law based on prior Supreme Court decisions but the states are trying to write their own loop holes to bypass the Court’s wise decision.

    Being an election year they may actually listen for a change.

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