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NY to Tax Amazon Purchases
[April 13, 2008]

NY to Tax Amazon Purchases


Originally posted on VoIP Blog - Tehrani.com, here: http://blog.tmcnet.com/blog/rich-tehrani/technology/ny-to-tax-amazon-purchases.html.

There is just something so mind-boggling about our nation's tax collection system. I was reading this MSNBC article about how New York State is looking to and likely will tax Amazon.com (News - Alert) purchases and it goes on about how New Yorkers are supposed to be paying sales tax on these purchases already.

In fact most states require you to pay sales tax on your out-of-state purchases today.

Obviously most people do not do this and the article further describes just how confusing it would be to figure out what you owe.

In case you aren't aware, currently if a company does not have operations in your state, they generally do not charge you sales tax. It is interesting to note that if a company exhibits at a trade show in a state, the state feels the company should subsequently pay sales tax there.

In one instance, my company TMC actually had an idea to get a major internet retailer involved in a  really interesting promotional idea that our ITEXPO attendees would have really benefited from. Guess what... The e-commerce company backed out because if they did anything at a trade show in Los Angeles... California would have pressured them to pay sales tax.


But I digress. We can thank Eliott Spitzer for passing a  bill that will require Amazon.com to collect sales tax on shipments sent to the Empire State.

On the one hand it is extremely fair to have all retailers pay state sales tax as currently shopping online hurts local merchants who do have to collect this tax.

The flipside to this argument of course is that the federal government has passed laws against taxing the internet and this New York State Law is probably in conflict with the federal law.

There is a lot more to this issue and our entire tax code has always fascinated me as it is so complex that it requires armies of lawyers and accountants to keep track of it all. One wonders if it wouldn't be better to just have all the states work together with the federal government to simplify the mess of a tax code we currently deal with.

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