NY Lawmakers Approve Internet Tax

    April 14, 2008

A new bill called the "Amazon Tax" has been approved by New York Legislators and is now awaiting the approval of New York governor David Patterson.

If Patterson signs the bill into law it will require online retailers, such as Amazon to collect sales tax on items shipped to New York. The bill is estimated to generate $50 million in tax revenue for the state.

James Sherin - President CEO of Retail Council New York
James Sherin – President CEO
(Photo Credit: RetailCouncilNY)

James Sherin, president CEO of the Retail Council New York, said the tax measure would level the playing field between New York retailers and online retailers who are not based in New York.

"This is a first step – but a critical one – in our ongoing battle to level the sales tax playing field between New York retailers and the out-of-state Internet giants that have, for years, capitalized on an unfair and unintended competitive advantage driven solely by tax policy,"Sherin told internetnews.

Amazon representatives said they were reviewing the legislation. They believe that the state law will be challenged in court.

The state Business Council is against the idea of requiring online companies to charge sales tax. "Albany invented the Amazon.com tax because they failed to cut spending," the council’s Heather Briccetti told the NYP. "As long as they don’t recognize the economic reality and continue to increase state spending, they’ll keep inventing new taxes like this one."

The new tax measure could compel other states to enact laws similar to New York. Some lawmakers though don’t think the measure would hold up in court. They say the courts have been reluctant to allow states to regulate Internet transactions.