CAPITOL Amazon suing state over sales tax law BY VALERIE BAUMAN The Associated Press
Amazon.com is suing New York over a new law that requires outof-state online companies to collect sales tax from shoppers in New York. “We are challenging the constitutionality of the recently enacted legislation in New York,” Amazon spokeswoman Patricia Smith said. Officials estimated the state would gain about $50 million by requiring Internet giants such as Amazon.com to collect state sales tax. New Yorkers are currently on an honor system to report their online spending when they file state tax returns. 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. The suit argues the change unfairly targets Amazon, is overly broad and vague, and violates the commerce clause of the constitution because it imposes tax-collection obligations on out-of-state entities. The suit also argues that the people linking to Amazon products are not agents, but are simply paid by the company for advertising. Hundreds of thousands of Web sites advertise for Amazon. New York now considers anyone who runs one of those sites from within the state an agent for Amazon. New York state has argued that the law closes a “tax loophole.” Tom Bergin, a spokesman for the state Department of Taxation and Finance, said the change is a necessary update for modern times. “Everyone in New York state either pays sales tax on articles that they buy or is required to pay sales tax on articles that they buy,” he said. “This is not a new law, this is just amending the law to bring some of the new technology — the Internet — into compliance.” Bergin would not comment on the lawsuit. Businesses with a physical presence in New York already collect the state sales tax on online purchases.
Tax on e-tailers would be going in wrong direction
Re Dec. 24 editorial on collecting sales tax from e-tailers: What on earth is wrong with you? Do we not pay enough taxes in this state and country? We are taxed in our state to the breaking point. No matter how much we are taxed, it doesn’t seem to be enough for our officials; more is always needed. The Internet seems to be the last haven for shoppers to purchase affordable items without paying huge taxes. And in all fairness to the retailers who post there, our local shops could do the same thing if they chose to. It does not in any way, shape or form seem to be legal for a retailer in Alabama to charge me sales tax just because I live in New York state. After all, if there is no sales tax on the item I purchased in Alabama, why should I have to pay New York state tax on the item I could have bought there with no tax?
The Dec. 28 letter [“Tax on e-tailers would be going in wrong direction”] by Mr. Splawnik illustrates the abysmal ignorance that prevails among the citizenry of our state about the problem of sales tax collection. Unfortunately, this ignorance pervades not only the taxpaying public but also many of the businesses authorized to collect and remit those taxes. Your correspondent asked the question, “If there is no sales tax on the item I purchased in Alabama, why should I have to pay New York state tax on the item I could have bought there with no tax?” The answer is that the tax being discussed here is the “sales and use tax.” The tax is, in reality, charged upon the actual use of the item within the taxing jurisdiction. As a point of fairness, if I buy a computer in Schenectady and my next-door neighbor buys from a mail-order house in Alabama the same computer at the same price, and we use those computers in our respective adjacent homes in Saratoga County, why should we not pay the same amount of tax? Moreover, this “sales and use tax” comprises not only the state’s legislated rate, but in most jurisdictions a local rate. A consumer in Amsterdam pays sales and use tax at a combined rate: 4 percent for the state government plus Montgomery County’s 4 percent, for a total of 8 percent. Just because an Alabama retailer sells a mail-order item to a resident of Amsterdam and does not collect a sales tax, that doesn’t absolve the purchaser of payment of that 8 percent sales and use tax. That tax is still an obligation of the purchaser, whether or not the retailer will do the service of collecting and remitting it. If Mr. Splawnik is displeased with the state’s sales and use tax system, he should be more concerned with helping end the recurring re-election of the idiots we seem always to send back to Albany. He might complain to his elected officials in Albany and in Amsterdam. First, however, he should get his facts straight. He should also realize that what he proposes, and possibly practices, is tax evasion.
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