One of the great things about buying from Amazon is that unless you live in the state of Washington (where Amazon is headquartered), you do not need to pay sales tax. That means a lot of people are able to save money purchasing from the giant online retailer. The same goes for other online retailers who aren’t located in the state that you reside in, they too are able to ship items to customers without needing to collect taxes. Unfortunately our tax-free days may be coming to an end if other states follow in the foot-steps of New York.
New York’s Governor is expected to sign a bill which has already been approved by New York legislators called the “Amazon Tax Bill.” If the governor signs it, online retailers (not just Amazon) would be forced to charge sales tax to customers who live in the state of New York. If there ever was a way to kill online retailers, this could be it. It’s been estimated that this new tax bill could bring in an extra 50 million dollars for the state. What state out there wouldn’t want an extra 50 million dollars right now? As you can imagine, experts predict that other states will follow in the footsteps of New York so that they too can bring in extra revenue.
People aren’t too happy about the thought of paying tax on the items that they purchase online. Someone who is happy about this though is James Sherin who is president and CEO of the Retail Council New York. He said, “This is a first step — but a critical one — in our ongoing battle to level the sales tax playing field between New York retailers and the out-of-state Internet giants that have, for years, capitalized on an unfair and unintended competitive advantage driven solely by tax policy.”
This is one of those matters that would be better off left to the Federal Government to regulate and not each state. Retailers are going to have one heck of a time trying to keep up with all of the different tax laws in each of the states and making sure that they are charging customers the correct rates! It makes you wonder if the legislators really thought this through and how it will impact Internet commerce. The smaller Internet retailers really don’t stand a chance because they won’t have the money to spend to make sure they are complying with all of the different laws in each of the different states.
It’ll sure be interesting to see what comes of this…