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May 2nd, 2008, 08:59 AM #1
The NEW NY Internet TAX Law
- Join Date
- January 18th, 2005
- West Coast USA
Amazon sues NY
"The dispute, which is before a state court in Manhattan, is heading toward a constitutional showdown that will center on whether New York State is hindering interstate commerce by imposing on out-of-state companies, such as Amazon.com, the burden of serving as a tax collector for New York."
Last edited by Adam Ward; May 2nd, 2008 at 09:59 AM.
May 2nd, 2008, 09:00 AM #2
May 2nd, 2008, 09:09 AM #3
Amazon is going to win this one, especially since the tax nexus issue has already been decided in the US Supreme Court.
On the flip side, I am a bit surprised that Amazon is not charging sales tax in my state, because it appears that they do have a distribution center here, which gives them a nexus. In this state, it is not really a sales tax (a tax on the consumer). It is called TPT (transaction privilege tax, a tax on the seller).There's good, fast and cheap. Pick any two.
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May 2nd, 2008, 09:51 AM #4
NY Affiliate Law
- Join Date
- October 7th, 2007
Last edited by ELD; May 2nd, 2008 at 10:19 AM. Reason: Deleted as I was hoping to address these questions to other AMs only
May 2nd, 2008, 10:48 AM #5
Thanks for the update Adam!
May 2nd, 2008, 12:27 PM #6
May 4th, 2008, 12:53 PM #7
- Join Date
- March 25th, 2008
I wonder if anyone has thought about the implications of this law. If you are an affiliate based in New York State all sales through your site will require the merchant to collect NYS sales tax. If a merchant isn't already required to collect this tax their first impulse will be to terminiate all NYS affiliates (as evidenced by deleted post from DLD). OK so you are not based in NYS, if this law goes through how long before other states jump on the band wagon? In these economic times, any new revenue that a state can generate would be welcome indeed, especially if the law has already been challenged. It seems to me this law has the potential to wipe out affiliate marketing. I wonder if any of the networks have thought about this. Also what about google & yahoo , how much money do they make on affiliate keyword purchases? I would be very interested to hear other's thoughts on this.
May 4th, 2008, 01:19 PM #8Originally Posted by smallaff
If the law does stand, I can envision some merchants terminating all NY affiliates to avoid the situation. Smart move, NY. (Not!)
May 4th, 2008, 01:21 PM #9
I decide when the pigs fly!
- Join Date
- January 18th, 2005
- New York, USA
May 4th, 2008, 01:22 PM #10
May 4th, 2008, 01:52 PM #11Originally Posted by Rhea
Bottom line, though, is that the law is clearly unconstitutional under previous US Supreme Court decisions, and that NY courts must declare it so. If the State of NY wishes to spend time, money and legal resources, they might be able to get it to the US Supreme Court (were they willing to re-examine an issue they've basically ruled on previously, thought in a different context and before the interent was a factor to be considered) in about 5 years.
May 4th, 2008, 04:29 PM #12
- Join Date
- March 25th, 2008
Thank you for explaining that to me, I wasn't quite sure my interpertation (sp?) was correct. I think you are right and being a NY affiliate the implications are huge for us, but I still think the whole industry should take a stand against this law. What's that old saying something about when they came for me there was no one left. Thank you again for your reply.
May 4th, 2008, 04:56 PM #13Originally Posted by smallaff
May 4th, 2008, 10:29 PM #14Originally Posted by MichaelColey
May 4th, 2008, 10:39 PM #15Originally Posted by Alan Hamilton
May 5th, 2008, 03:23 AM #16
NY would have no way to verify the sales, I believe they, NYS has no authority to audit Amazon a foreign corporation. (meaning a corp outside the the state of NY.)
Amazon is very slick about sales tax, any merchant/vendor selling thru Amazon doesn't automatically collect sales tax on sales shipped in their home state.
You don't have such an option when you sign up.
They state in their TOS that they assume the sales tax is built into your selling price.
But if you wish to have tax calculated on your sales you need to go thru a bunch of hoops to have it incorporated into your orders.
May 5th, 2008, 07:04 AM #17
Good for Amazon!
Originally Posted by AffiliateHound
The California...governor(?) might be in for a similar big surprise.
About the NY tax, and the possibility of it spreading--If consumers realize their internet purchases are at risk of being taxed, I'm sure there will be a BIG uproar! Some people shop online just to avoid the tax, on items costly enough where it's cheaper to pay for shipping instead.
What it needs is publicity, and publicity that's specifically against it. It needs to be made clear that the effects of the tax won't stop at the NY state lines.
IMO we should all run at least 1 article about NY's tax attempt so consumers will know what the state is up to--and that it may spread. Of course, it'd need to go on a site that actually gets traffic. The vast majority of people don't want another tax. Let people know what NY is up to--and, make it easy for people to complain to their legislators! The "leak" of a nonsales article on a sales site is usually bad, but if this tax spreads, that'll be worse.
I envision a link, "STOP THE INTERNET TAX". On the other side of that link, a couple of paragraphs explaining what's going on, then a "letter to your legislator" for people to copy/paste. The finale--a link (which opens in a new window, so they still have the "letter" available) to a page which lists the email addresses of legislators. (Or better yet--a way to send a prewritten email to the right place with just a click!) I think there's a noncommercial site already out there with a list of legislator contacts...I'd have to Google it up for the URL.
I've seen various sites recruit people to write their legislators this way. I know I've responded to a few of these appeals. This is one of the few areas where content is...
Seriously though, most people hate tax, especially when there wasn't one before, and I'm sure a lot will protest if all it takes to do so is copy/paste a paragraph into an email and click "send."There is no knowledge that is not power. ~Hemingway
May 5th, 2008, 07:18 AM #18Originally Posted by Alan Hamilton
-rematt"I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon
May 5th, 2008, 07:31 AM #19
The original link is not working for me. Here's one from the AP:
Amazon Sues NY to Stop the Stupid
Now...a page could say...(this is just a quick version, and I haven't been to bed yet. So it may need reworking.) And yeah, they probably don't call it an "Internet Tax." But the internet was pretty much tax-free, so that's the bottom line of it.
The below (in this post) is offered for copying:
STOP THE INTERNET TAX!
The State of New York is trying to impose a tax on companies who do more than $10,000 worth of business within their state lines. This would affect pretty much every company with a well-known brand.
Like with any other proposed method of charging a new tax, every other state in America will be watching closely to see whether New York can get away with imposing this Internet Tax.
Amazon thinks they can't, and has sued to make sure that they don't. And, NY's proposed law seems to be unconstitutional, judging by prior decisions of the US Supreme Court. But, that does not mean the issue is settled. Far from it. Before the matter is settled, many other states may try to extend their taxation to your Internet purchases. And until the final verdict comes in, you may find yourself being taxed where you haven't been before.
Not only that, but rather than getting more money, states which try to adopt the NY Internet Tax will face costly lawsuits. These costs will be paid from the public funds--funds they would have been able to spend on things which actually help their residents.
Write your state senators and representatives! Tell them you do not want an Internet Tax!
---------STOP COPYING HERE (And don't copy this line! I have seen sites where lines like this are left in...groan...)----------------
There still needs to be a paragraph for the people to copy into their emails...I'll put my offering in the next post.There is no knowledge that is not power. ~Hemingway
May 5th, 2008, 07:52 AM #20
This could work for people to mail:
I have been reading about New York State's attempt to put a tax on Internet purchases. This worries me a lot. I know that taxes in one state are prone to becoming taxes in many states.
If such a thing were to go into effect here, our state's internet businesses would lose out on orders from all the other states. In this economy, our state cannot afford to discourage people from other places from doing business with our local Internet-enabled companies.
Please, do your part to prevent any tax like that from getting onto the books in our state!
END OF LETTER
It looks like it's going to take a bit of research to find a list of STATE LEVEL legislators, or a site that has it (probably better to link to an offsite list w/new window, since it'd be a huge list). There's a list of national ones that's easy to find, but not one with the emails of all the in-state ones. Since it's a state-legislature-level issue (so far), writing the ones in Washington won't do any good.
I didn't put the parts about constitutionality in, because I think Average Joe Reader wouldn't think of that, and the letters for copy/pasting should look like something a regular constituent should write.
A few individual letters that do bring the constitutional and lawsuit issues to mind would be good. Perhaps the ones we ourselves email in with? It would be expected that a few people would think of these things--just not a whole horde of them.
There's no salutation or closing, because if I put "Dear (Congressperson)" some idiot is sure to copy/paste it without customizing it, which would add a high degree of lameness to the effect. I'm trying to make it as foolproof as possible.
I'd have loved to be able to quote figures ("It would affect the jobs of X amount of people if interstate commerce was effectively blocked!") but I don't know such specifics, and certainly not for all 50 states.
That's it for now.
Thoughts?There is no knowledge that is not power. ~Hemingway
May 5th, 2008, 08:12 AM #21
Want to be sure I'm clear on this ahead of putting something on my blog that speaks to NYS fisher persons... In this case, the following 2 scenarios would be true:
1.) A Pennsylvannia shopper visits my NY based affiliate site, and purchases from a fly rod company in Oregon. Assuming that fly rod company does more than $10,000 in business in NY, a tax would have to be levied, either to the consumer at point of purchase, or eaten by the merchant after the fact.
2.) A NY customer goes directly to that same fly rod company. Sales tax must be levied on any purchase, again, either to the consumer, or eaten by the rod company.
May 5th, 2008, 08:22 AM #22
People will scream and holler, but an internet purchase sales tax is probably inevitable. Maybe not this year, maybe not next year, but probably inevitable. Do you think the states and the feds are going to allow billions in untaxed sales go on indefinitely? And, if they don't eventually tax internet sales, they will tax other things or increase taxes on things already taxed. We will "pay" one way or another.
May 5th, 2008, 08:39 AM #23We will "pay" one way or another.
Unfortunately, it doesn't always happen that way, as NY has already burdened tobacco companies, wireless providers, etc. How many times can the same dollar be taxed in a year?
May 5th, 2008, 09:51 AM #24Originally Posted by Kevin
May 5th, 2008, 09:55 AM #25
You're positive Michael? That's not the way I read that. I thought they were treating affiliates as "brick and mortar extensions" of Amazon (any program), and therefore any of my sales were taxable, since I'm a NY resident.
If you came to my house, and made a purchase while you were at Wal-Mart here, you'd pay NY sales tax. And i think that's what they're trying to extend out to the net through affiliates.
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