Great news for those who have been worried about the “Amazon tax,” a state of New York tax on items bought on Amazon, Overstock and other e-commerce sites and shipped to New York. The tax has been repealed in the New York state Senate and is awaiting approval from the state Assembly.
There is speculation as to whether or not the Assembly is going to approve the repeal. If they do approve it, it would send a message to all other states who are considering following the tax model that New York has implemented. Following the inception of New York’s tax on e-commerce, other states have considered applying a tax to online transactions. There has been some talk in California, in particular, about a possible “iTunes tax” that would tax downloads of music files.
The tax has been controversial for several reasons. For one, Amazon and Overstock had dropped all of their New York affiliates in order to not be affected by the law, which considers NY affiliates as a taxable part of the e-company. Since then, dropped affiliates have been responding in force to the new legislation that has left them in the hole. Another effect of the tax is that it leaves New Yorkers little choice in purchasing online. Facing a new internet tax, people are ditching e-com in favor of traditional brick and mortar stores, leaving online affiliates hurting. Another objection to the law is that it complicates the tax code which is supposed to be getting simpler.
We have yet to see how the tax legislation, repealed or not, will further affect the future of e-commerce.
For more information on taxes and tax software, please visit Tax-Compare.com.
Contact:
Jennifer Silva
Zilker Ventures
(512) 448-9031
Tags: amazon tax, e-commerce, ecommerce, internet tax, new york tax, online tax, state tax, tax, tax software
