Alternatives To New York Ecommerce Taxation

In a move sure to brazen other states into enacting laws to collect sales tax on out of state purchases, has stated that it "will begin collecting sales tax on items shipped to destinations within the State of New York".  Lame.  One of the main staples of Internet commerce is the fact that items purchased 'there' are not subject to sales tax, if the company has no presence in your home state.  New York has a long history on overreaching its bounds on taxation issues, but this one seems to strike at the heart of ecommerce.

To be fair though, the tax exemption can't last forever.  I realize that as people conduct more and more business online, the amount of money collected through traditional channels will certainly decrease.  But, is this really the answer to the problem?

I think not.  Exploring some possibilities, what if a tax was instead put on items shipped from a given location?  This way, a state can get in on what it feels are its share of revenues on any commercial exchange within the jurisdiction of its own state?  This feels more just because it targets all exchanges instead of singling out Internet originations.  This has the interesting side effect of spreading the cost a little more evenly across all sorts of commercial interactions.  In addition, it provides a tax 'loophole' for those that exchange in virtual or electronic goods, that, in my opinion, ought to enjoy tax free status for the time being anyway.

In the end, I think it unfortunate that Amazon is not taking a more aggressive stand on this because my own state legislature is licking its chops at the prospect of cutting into the revenue rich ecommerce taxation issue.  We’ll see how long this all lasts.

Posted on May 16
Written by Wayne Hartman