It was only a matter of time before states began making moves to level the retail playing field when it comes to online stores. Barring “campaign support” from brick and mortar establishments, this of course has less to do with fair trade and more to do with squeezing cash from every possible avenue. Brainchild of fallen hooker-loving ex-Governor Eliot Spitzer, New York legislators approved a bill last week that if signed by newly-instated cocaine and weed-loving Governer David Paterson, would force online retailers to collect state sales tax on all sales delivered to New York addresses. Paterson is expected to sign the bill. Currently, online retailers are only required to collect sales tax on purchases shipped to states in which they have physical operations. A quote from James Sherin, president CEO of the Retail Council New York:
“This is a first step, but a critical one, in our ongoing battle to level the sales tax playing field between New York retailers and the out-of-state Internet giants that have, for years, capitalized on an unfair and unintended competitive advantage driven solely by tax policy.”
It seems logical that businesses should collect sales taxes in states where they makes sales, but the bill treads into muddy waters with regards to interstate taxes and how they should apply to online retailers. While the bill will certainly be met with strong opposition from the likes of Amazon, it is also expected to amount to an additional $50 million in tax revenue for New York State this fiscal year alone. Once other states catch a whiff of the potential cash slipping through their fingers each year, expect many to follow suit and implement similar policies.