Wednesday, January 14, 2009

Sales Tax exemption may be over for soon

[caption id="attachment_1191" align="alignright" width="310" caption="Basically New York giving Amazon the finger. "Pay Up Bitch!""]Bascially New York giving Amazon the finger.[/caption]

A new New York state tax law (being called the "Amazon Tax") has been given the thumbs up.  New York Governor David Paterson signed a new state budget early 2008 making any online retailer accountable for collecting state sales tax for any resident of New York, as well of any New York based website that earns referrals from that retailer...  In other words what this means is that since Amazon offers  affiliate linking which allows any business (including New York) to advertise Amazon's products on their own site, they (Amazon) have to pay the sales tax.

After discovering such law was signed, Amazon filed a lawsuit against the state, claiming that the company doesn't have any offices or property in New York, or any physical representation soliciting their business there.  Anybody can join Amazon's referral program. the company does  not track the origin of each referral.

In any case, Judge Eileen Bransten dismissed their lawsuit yesterday, including one brought from  saying that their law doesn't specifically target their companies and that the state is only trying to get them to do their fair share in tax collection.

Basically, what it means is Amazon and any other large online retailer will have to start collecting sales tax on all purchased made by New York residents through their sites, regardless of whether they got there through a New York-based affiliate link or not.  I can imagine the outrage any New York resident is enduring escaping having to pay sales tax.

Amazon and Overstock are most likely planning to appeal the decisions.   In any event, considering the recession and  tighter budget every state is going through, most likely other states will follow New York in getting their fair share.

If that is the case, then there will be no other way to obtain merchandise tax free.