The Amazon Tax & Screwing with the people
| Amazon Sues New York State Over Tax Law
By Mike Sachoff - Fri, 05/02/2008 - 9:37am.
Claims it violates constitution
Amazon.com is suing the state of New York for its recently enacted tax law
that makes it mandatory for online retailers to collect sales tax on items
shipped to the state.
The law states that Internet retailers with affiliates in New York must collect
New York sales tax because those affiliates have a physical presence in the
state. The new law is estimated to generate $50 million in tax revenue for
the state.
In the lawsuit Amazon argues that the new tax law, "Violates the Commerce
Clause of the United States Constitution, both facially and as applied to
Amazon, because it imposes tax-collection obligations on out-of-state entities
such as Amazon who have no substantial nexus with New York."
Amazon argues that its affiliate advertisers act independently of Amazon,
and "they alone choose the timing, format, and placement of the Amazon
advertisements on their websites," and they do not solicit or generate sales
on behalf of Amazon.
The company also says that the tax law violates the equal protection clause
of the constitution because it directly targets Amazon. "It was carefully
crafted to increase state tax revenues by forcing Amazon to collect sales
and use taxes," the suit says and "state officials have described the statute
as the 'Amazon Tax.' " |
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Why does this make no sense and why does it hurt many companies online? The
term "affiliate" as used in the NY Law does NOT refer to Amazon having a
physical presence in the state. They are saying that if they have a banner
ad on Amazon.Com that links to a company in New York, then Amazon has to
collect sales taxes on Amazon sales ?? How is this even relevant?
My reply to this article is as follows:
The Amazon tax
What would I do if I were Jeff Bezos? I would alter my order system to
prohibit any sales to New York Residence.
It won't last because the thousands of people who live in New York will
scream bloody murder at their politicians because they will see that their
own representatives are working to limit their online shopping options.
Amazon would be doing a public service in the long run because it will
send a message to other states that try to meddle in internet commerce.
In short I think pulling the plug on New York Sales for a while will do
more and may cost less than a law suit. Let the people vote with their public
outrage.
We the People can also vote with our wallets. We all understand tight
times and that states also need income, however this type of law is bad for
several reasons pointed out in the article. Reason one...no state should
have a right to enact a tax specifically aimed at a specific business and
their customers, whether or not that business is located in that state.
Second, eCommerce is a major sector of our economy. To try to demand
that every sale made online pay sales taxes to the state it is shipped to
will put 90% of the smaller companies out of business because it is impossible
for them to manage sales taxes for 50 states plus all the in-state tax
jurisdictions involved. Result, more people out of work and no revenue
to the state anyway. Just plain stupidity was at work in New York.
( Stop it before it spreads because this is nothing more than one
state attempting to spread it's jurisdiction across it's own borders.
)
This is an example of why we need to dump politicians,
not just at the federal level but at the state level as well. In many
ways states cause us more grief closer to home than the US Congress because
they enact the laws that effect us on a daily basis. |
