NY Gov Spitzer abandons Net Tax (for "Now")

"now is not the right time" indeed.
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Spitzer Abandons Amazon Tax
Republicans Were Ready To Paint Him as 'Grinch'

By JACOB GERSHMAN
Staff Reporter of the Sun
November 15, 2007

In a second major policy reversal in less than a day, Governor Spitzer is backing down from a plan to require Amazon.com and other online retailers to charge state and local sales taxes on all purchases from New York.

Yesterday, just hours after The New York Sun reported on the new revenue collection scheme, the Spitzer administration announced that it was burying it for the time being — at least until after the Christmas shopping season. The move saved New York City shoppers from having to pay an additional 8.375% on many Amazon.com goods.

"Governor Spitzer believes that now is not the right time to be increasing sales taxes on New Yorkers," Mr. Spitzer's budget director, Paul Francis, said in a statement. "He has directed the Department of Tax and Finance to pull back its interpretation that would require some Internet retailers that do not collect sales tax to do so."

The turnabout came just hours after Mr. Spitzer said he was dropping his plan to allow illegal immigrants in New York to obtain driver's licenses.

In this latest instance, Mr. Spitzer wasted little time before pulling the plug on another controversial policy, aborting it before it threatened to snowball into a distraction for his administration.

http://www.nysun.com/article/66465

Good god this state taxes everything and than some as it is. Ladies and gentlemen, welcome to NY, where you pay a tax to cough.

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Originally Posted by hiss srq

Good god this state taxes everything and than some as it is. Ladies and gentlemen, welcome to NY, where you pay a tax to cough.

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Agreed. I just found out that I was paying a min of 30% tax on my wireless express card. Mostly City and State related. Too bad there isn't a satellite express card. No MTA surcharges would apply.

Timing is everything, to propose a tax hike during the holiday season is simply, stupid.....

Talk about rookie mistakes, first the drivers license for illegal aliens & the tax hike on products bought from the internet, just plain stupid.....

Spitzer destroyed any chance he has at reelection. He thinks he can be a Governor the same way he was Attorney General. His problem is those two positions are vastly different in the way you handle things. Unless he starts really doing things to help the taxpayers of this state he's done.

Is it me or does this guy just like to come up with ideas that are just not needed? Is he bored or something?

God help me, I voted for this tool.

He's gotta keep his name out there, no matter how good or bad. It's called an attention *****.

I won't get into the particulars of the timing of this, but I do want to mention a few things. Under the NY tax code, you are required to pay sales tax to NYS for items purchased out of state. This isn't anything new under Spitzer, it's a long standing part of the tax code. Ever buy a new car in NJ or PA and register it in NY? I have - you are expected to pay the difference between the NYS tax and what you paid in the state of purchase. In fact, if I purchased the car upstate, with a lower local sales tax, I will still be charged my local (Nassau County) rate if that is my registration address.

If you purchase an item on-line from a NY-based company (B&H Photo, for instance) for delivery in NY, you will be charged NY sales tax, while you typically are not charged if purchasing from an out-of-state vendor. A number of states do this same thing, which can be seen as a disadvantage to local vendors. Also, for at least the last year, the NYS income tax worksheets include a portion to calculate any sales tax you owe on out-of-state purchases used in NY - in addition to on-line purchases, if you go to IKEA in NJ and pick up a car-load of cheap furniture for your NY apartment, you are expected to account for that on your income tax return and pay the appropriate sales tax. I would suspect few people do this, and this proposal is a way to help NY recoup some of the sales tax revenue it feels (based on the tax law that your representatives enacted) it is due.

Most on-line retailers have balked at various state plans to do the same, claiming it would be difficult to keep track of various tax rates in different localities, however with an updated database, it shouldn't be too difficult to calculate sales tax due based on delivery ZIP Code. Look for this to become more widespread in the future.

Spoken like a true tax and spend Democrat.....LOLOL ;) j/k j/k j/k

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Originally Posted by moose135

I won't get into the particulars of the timing of this, but I do want to mention a few things. Under the NY tax code, you are required to pay sales tax to NYS for items purchased out of state. This isn't anything new under Spitzer, it's a long standing part of the tax code. Ever buy a new car in NJ or PA and register it in NY? I have - you are expected to pay the difference between the NYS tax and what you paid in the state of purchase. In fact, if I purchased the car upstate, with a lower local sales tax, I will still be charged my local (Nassau County) rate if that is my registration address.

If you purchase an item on-line from a NY-based company (B&H Photo, for instance) for delivery in NY, you will be charged NY sales tax, while you typically are not charged if purchasing from an out-of-state vendor. A number of states do this same thing, which can be seen as a disadvantage to local vendors. Also, for at least the last year, the NYS income tax worksheets include a portion to calculate any sales tax you owe on out-of-state purchases used in NY - in addition to on-line purchases, if you go to IKEA in NJ and pick up a car-load of cheap furniture for your NY apartment, you are expected to account for that on your income tax return and pay the appropriate sales tax. I would suspect few people do this, and this proposal is a way to help NY recoup some of the sales tax revenue it feels (based on the tax law that your representatives enacted) it is due.

Most on-line retailers have balked at various state plans to do the same, claiming it would be difficult to keep track of various tax rates in different localities, however with an updated database, it shouldn't be too difficult to calculate sales tax due based on delivery ZIP Code. Look for this to become more widespread in the future.

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Originally Posted by T-Bird76

Spoken like a true tax and spend Democrat.....LOLOL ;) j/k j/k j/k

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As opposed to the current "cut taxes and keep spending" White House :wink:

In the words of Supreme Court Justice Oliver Wendell Holmes, “Taxes are the price we pay for a civilized society.”

The problem is the U.S. Supreme Court declared years ago that taxing internet sales across state borders thwarts interstate commerce as laws are currently written, but that Congress has the power to change the laws. So far Congress has issued a moratorium on allowing taxes on interstate transactions but it's likely only a matter of time until they do.

Under current law, if a retailer has a physical presence in New York State, their online store must charge sales tax to New Yorkers...i.e. Apple's site is based in California, but since there are Apple retail stores in New York, they must charge sales tax to NYers making purchases online. Spitzer was going to circumvent this by targeting Amazon, which does not have any physical operations in New York State, but through their affiliate programs it could probably be argued that they do. The problem is Amazon's operation is unique in functionality and size, so even if it were proven that Amazon's NY customers should be taxed, a.) it would mainly affect Amazon and no other sites, so the money collected would be negligible and b.) there are so many die-hard Amazon shoppers in NY the outcry would be deafening.