One June 1, New York will start to collect tax on Amazon.com purchases - and other states may follow.
By Jia Lynn Yang, writer-reporter
http://money.cnn.com/2008/05/30/technology/yang_amazon.fortune/index.htm?postversion=2008053017
NEW YORK (Fortune) -- One of the great things about shopping on sites like Amazon has been not having to pay a dime in taxes (or shipping, if you've spent enough). Since the dawn of Web commerce, the rule was that as long as a retailer didn't have a physical presence in the shopper's state, the company didn't collect a sales tax.
Well, it was fun while it lasted. Starting June 1, Amazon (AMZN, Fortune 500) will charge a sales tax to shoppers who live in New York, even though the retailer maintains no physical operations in the Empire State.
Why the crackdown? With the economy in the tank, the State of New York was getting desperate to fill its budget gap. So it expanded its rules about what constitutes a business presence in the state. Amazon lets other sites earn commissions by linking to products on its pages as part of a program called Amazon Associates. And because some of those sites are based in New York, the state considers the Seattle-based retailer fair game.
Amazon, for its part, has filed suit in the New York Supreme Court arguing the law is unconstitutional. The company says these third-party sites shouldn't be counted as agents of Amazon in New York because they're totally independent from the retailer. Instead, they act merely as advertisers who are compensated with commissions. Also in its complaint, Amazon points out there are hundreds of thousands of associates in the program, and the company can't always determine whether these sites are actually run by New Yorkers.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment