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Overstock dropped Business Know-How a note, telling the site it had been booted from the Overstock Affiliate Program. As a New York-based site, Overstock faced the prospect of collecting sales tax from business driven through affiliates like Business Know-How.
"New York: You're losing far more than you'll gain with foolish laws like this one," Business Know-How said, citing not only the sales tax the state won't collect, but the income tax they won't get either based on those affiliate commissions.
The Bits Blog noted a comment from Overstock about their decision to back down rather than fight for their New York affiliates:
"We believe the law is unconstitutional and won’t stand the test of the courts, but in the meantime we have been very careful to keep our footprint just in Utah," said Jonathan Johnson, Overstock’s senior vice president for corporate affairs. "We can’t afford to have our New York affiliates up online if it subjects us to New York sales taxes."
The company’s goal is "showing the New York governor and legislature that this is bad for New York businesses," Mr. Johnson said. "There are affiliates in New York who will see their business go away because of a not-so-thoughtful action by the New York State legislature."
New York's law doesn't really subject Overstock itself to sales taxes, but to the expense of implementing software to calculate those taxes and add them to relevant sales. Amazon has no passionate desire to do this either, though Bits noted Amazon will collect New York sales taxes starting June 1.
New York's unabashed cash grab opens the prospect of more states making similar requirements of online businesses running affiliate programs. Here's a thought we think could be much scarier: what if Congress decided the country could benefit from a national sales tax on online sales?
In April 2008, Forrester Research predicted online retail sales , excluding travel, in 2008 would rise by 17 percent to $204 billion. A one-percent tax could drop a couple billion dollars into the US Treasury.
Precedents. Scary things.
New York Goes Gangsta With Tax LawAmazon Sues New York State Over Tax LawAmazon And New York's Battle On Sales TaxSpitzer, Amazon.com At Odds Over Sales TaxWayne Davies Answers Tax QuestionsNY Lawmakers Approve Internet TaxOverstock.com Sues New York Over Tax LawWashington Online Sales Tax Now Law New York Getting Physical With Amazon.comAmazon Says No To New York State Tax 
Comments
New york business's will leave...
Kudos to Overstock
--and shame on the State of New York. What a state it is in....
NY Tax out of control
This sales tax thing will expand beyond the affiliates with time and invade all on line business conducted in NY. Then the rest of the states will follow suite and try to initiate the same tax because of the perceived revenues resulting in a catastrophic collapse of online merchants. The federals not wanting to be left out will then slam us with a notional sales tax and the nightmare will be complete. Perhaps a well funded merchant like Amazon could afford to purchase, install and maintain software designed to keep[ track of all of the various taxes but the average merchant doing business online would simply have to close the virtual door and go back to mowing lawns for a living.
When will the various governments of our country finally get a clue and figure out why the American public struggles to make ends meet and decide to operate within their own means and stop asking for more and more? This is getting well out of hand and what the governments need to learn is that the people run the country with daily commerce and need to retain enough of their income in order to survive and maintain business. Government never has and never can, no matter how much money it collects, influence commerce and make the citizen more profitable. Government can only impede commerce.
The american people are
The american people are sheep. They will do whatever they are told and will believe whatever they are told.
Example:
2 planes knock down 3 buildings and amazingly it also happened in NY. It's a miracle!!
Sheep?
It is amazing that the plan to knock down those buildings was conceived in a tent full of sheep shaggers.
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