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Another Rant On NYS Internet Taxes

Posted by on Jun 6, 2008

Two weeks ago, I wrote about how New York state is killing my attempt to try to do more business on the internet. It’s all about New York state deciding it has the right to taxes that many companies don’t charge for doing business on the internet.

Since that time, six of the companies that I’ve been trying to promote have decided to drop me from participating with them because I live in New York state; isn’t that a blip? In their minds, they don’t want to have to deal with having to be responsible for collecting, then paying, taxes to the state of New York, and would rather not do any business with anyone in the state, which is still number two or three in population across the country, than collect these taxes.

It brings up the conversation of whether states have the right to collect taxes on its citizens who decide to buy their products elsewhere, whether it’s on the internet or not. For instance, if you’re in Ohio and decide to buy a car, then come back to New York, are you supposed to pay taxes on that car, even if you happened to pay the taxes in Ohio? Or, if I’m in an airport in Chicago and decide to buy a few tee shirts, when I get back into town am I supposed to declare those purchases and pay New York the taxes I’d have to pay if I’d bought those same items here?

I have a friend who bought her cigarettes online to try to save some money, through one of the Native American websites. Two years later, she received a bill from the state of New Jersey for the taxes on those cigarettes, even though she wouldn’t have had to pay taxes if she’d bought them on the reservation, for almost $1,500. Personally, I think that’s outrageous, and it’s seems to be a restraint of trade issue of some kind.

I know that while I live in New York that any products that I create and sell to other New Yorkers has to be taxed, and I don’t really have a problem with that. It’s the cost of living here and doing business here. But if I had to suddenly start collecting sales tax for people who lived in other states and then sending checks to those states, I know that I wouldn’t be selling to anyone in those states, or else I’d sell and just not pay; what’s another state going to do other than possibly sue me, and I know they’d be going after much bigger game than me. However, just having to even have that as something I might have to consider isn’t fair to me, or anyone else doing business online.

Unfortunately, we seem to be stuck with it at this point in time. I hope Amazon’s lawsuit against our state ends up in their favor, but I don’t have high hopes for that happening. Andrew Cuomo isn’t as much of a bulldog as our previous Attorney General (who shall remain nameless since he disappointed me as our previous governor), but he’s had a couple of big time wins against insurance companies, which proves he’s more than up to the challenge.

So, I guess I’ll just pout a little bit, deal with the defectors, and see how it all falls out. I’m still going to continue trying to find more affiliates that aren’t ready to defect just yet, like the one below. Let’s see how it all ends up in the end.


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2 Comments »

Not such a big deal in my book. Plenty of other stuff I do requires people to pay sales tax; we just collect it and go. I guess with having local retail business(es) that collect sales tax, I don’t see it as a problem. Either way… however the suit goes… I’ll do whatever’s necessary, and keep going. At least this way, I’m not the one having to collect the sales tax and send it to the state (whew!)

June 7th, 2008 | 6:42 AM
Mitch:

The only reason I’ve seen it as a big deal is because I’ve tried to be as selective as possibly in the companies I’ve chosen to advertise for. Also, I still believe it’s going to be an even bigger deal at some point, and then internet commerce might be reduced to only being able to market instate products, since those folks will already be set up for reporting purposes to their individual state. It’s not what the internet was meant to be, IMHO.

June 7th, 2008 | 9:55 AM