I previously blogged about how ridiculous this affiliate tax is and how NYS should repeal it. If we, as a society, want to enforce sales tax on the Internet, we should do it on a national level (by Congress) and not use some arbitrary data point, such as suggesting an affiliate program should constitute a tax nexus. Amazon and other eCommerce sites aren't using the local services that sales taxes are supposed to fund.
The tax won't stop me from using Amazon - I probably order from Amazon at least 5-6 times per month, and it's the excellent service and competitive pricing that keeps me coming back. But seeing that sales tax line item during checkout will annoy me each time I see it. Overstock has filed a lawsuit challenging the law, as has Amazon, so let's hope they're successful in getting this thrown out.
Since as New York residents we're already required to pay the sales tax on purchases from Amazon (and we sign our forms each April affirming that we've added the appropriate amount of tax to our returns), wouldn't you rather have Amazon (and other internet retailers) taking it out as you go, as opposed to being required to track it throughout the year?
Posted by: andrew s. | June 02, 2008 at 10:06 AM
Andrew S - I'm fine with paying the taxes as long as it's applied equally to all. Arbitrarily deciding that an affiliate program constitutes a tax nexus, so a handful of sites have to collect and remit taxes for buyers from one state makes no sense to me. As I point out in the post, if we want to allow states to force ecommerce and mail-order companies to collect taxes, that should be done by Congress on a comprehensive basis. The NYS action to only focus on those with an affiliate program is capricious and is likely more a favor to NYS-headquartered Barnes & Noble than it is a comprehensive approach to sound tax policy.
Posted by: Barry Graubart | June 02, 2008 at 10:37 AM