Overstock and Patrick Byrne sue New York over Amazon Tax

New York's new online tax law is now facing lawsuits from two big-name online retailers. A month ago, Amazon sued that Empire State over its so-called Amazon Tax, and on Friday, cut-rate e-tailer Overstock.com filed its own suit, reiterating that the Amazon Tax affects more than just Amazon. Under Governor David Patterson's …

[Gary]

Taxes we don't need your stinking taxes!

All this says is yet again the global aspect of internet trade outpace's the ability of local gov' to gather revenue. Should not these people realised by now that it is futile to try and tax internet trade and moved to a collection scheme based upon the end user.

We already pay tax on Income, Savings, Fuel, Energy etc. Now I recognise that taxing out of state purchases is an effort to support local traders, who may also be making out of state profits. So why not follow the model of the Mail and Telecoms industry and declare a common trade balance. e.g.

Each trader reports the total of the trades they make to out of state addresses to a central federal unit. The unit then cancels all trades on a state by state basis, the deficit is charged to the excess-trade states and credited to those who's trade is under represented.

The same model could be used internationally (and is, see currency exchange) to balance out of country trade, and would have helped prevent the current situation where the US is basically owned by China because of the massive imports that it takes from that country.

Alien, because I have found no intelligent life on Earth.

[Anonymous Coward]

Re: Taxes we don't need your stinking taxes!

Oh yes, we do!!!

Gimme, gimme, gimme... Cash, ohhhh....

[Chad H.]

Spend Taxes, Buy Civlisation

Okay jokes about buying something thats not fit for purpose, am I and Mayor Bloomberg the only people in the world happy to pay tax? No Roads, No Schools, No Fire brigade/Department, no Police, etc.

[Aubry Thonon]

Shock, Horror

As much as I hate to side with a government agency on Tax issues, I don't see what Amazon and Overstock are bitching about.

The law is fairly specific: if the seller is in NY jurisdiction, the shop must collect the sales tax. Neither Amazon nor Overstock have any legal grounds to stand on - local taxes are local taxes, if you don't like them, get them repealed or don't trade in that area. In that respect, Overstock did the correct thing and simply dropped their NY affiliates rather than collect taxes on those sales.

On the other hand, the *affiliates* may have ground to take NY to court for loss of business... IANAL, but depending on how old that Tax law is, they may have grounds to see it repealed as it obviously interfered with their business.

[Jim]

Useful idiots

Yes, the useful idiots (of the big government) are the only people in the world happy to pay taxes. How many different times do you have to collect taxes in the name of roads and schools? The roads are paid by gasoline excise tax, and the public schools are paid by property tax. FD and PD? by the property tax and income tax.

BTW, higher taxes always mean worse roads, worse schools, worse FD and worse PD . . . because higher tax revenue enable more boondongle pet projects started, the funding of which will take money from the regular maintenance of roads, schools, FD and PD in the inevitable lean years. Politicians know very well that the useful idiots will support tax hike when roads, schools, FD and PD break . . . so they budget for boondongle pet projects first. Higher tax rate also impede commerce.

[Anonymous Coward]

Jim

Your an idiot - I was going to go into an extended rant but I reckon that says it all. No need to rub your nose in it, it must be embarrassing enough just getting out of bed in the morning.

BTW what actually is a boondongle ? Is this an Americanism I am totally unaware of ... well thats just awesome dude.

[dervheid]

Must have seemed...

like such a good idea (lots of easy, low-effort dollars) to the legislature at the time.

Wonder if it'll look that way once the lawsuits are dealt with?

Lawyers 1 Suckers 0 (yet again)

Lawyers = ;-(

No lawyers = :-)

[Spleen]

@Chad

Keep going... "no steel, no fuel, no power, no telecoms (including Internet), no sugar, no transportation"... wait, hang on, all those were privatised at one point and somehow we managed to keep producing them when they were privatised.

[Anonymous Coward]

@Jim

I am happy to pay taxes. I like schools, hospitals, roads, police, my rubbish being taken away, my country being defended, those unable to support themselves not having to starve in the gutter or become prostitutes, old people being able to retire and so on.

I would like that taxes were spent a little better but that is a completely different sack of cats to actually paying tax in the first place.

Oh, RE: more tax = less services, that is the most absurd statement I have seen in a long time. I anoint you an idiotard, sir. Do you hear me? and idiotard.

[dervheid]

@ Lee

I'm sort of with you, but I keep seeing reductions in "schools, hospitals, roads, police, my rubbish being taken away...those unable to support themselves not having to starve in the gutter or become prostitutes, old people being able to retire and so on"

As for "my country being defended", I don't see much reality of that, despite the effort of the troops. Unless you equate 'defence' with 'knee-jerk reactionary paranoia'

Coupled with what appear to be constant increases in taxes, the equation "more tax = less services" which in isolation may seem absurd, appears rather valid at the moment. Wrong, but valid.

[Tom]

Yep, exactly as I predicted a couple of months ago

Going to court where it is likely to be found to be an unconstitutional restraint of interstate trade. Only the idiocracy of NYC and EU could fail to see this predictable result.

[Maligned Truth]

Local taxes raised, again!

Many cities now have implemented an additional "Fire tax", and are looking at a Police and EMT (Ambulance) assessment, per use, of $450 per call.

Our fair city of 20,000 now pays $240 per house, $1200 per business FIRE tax, assessed on top of the regular property taxation $3500 per household,

$12,000 per business (averages) that is propping up many mistresses of the the local commissioners...

Getting less government, but costing you much more? Isn't it time for a tax revolt?

[Dave Bell]

Greed.

I have, over many years, heard a variety of stories about sales taxes in the USA.

Amongst them, that of the taxmen chasing after private individuals for the tax on items they've sold, from what are apparently called "yard sales".

Compare this to the UK, where the small-scale operation, even a business, has the choice of staying outside the VAT system.

VAT isn't sales tax, but we don't chase every last penny. Though this Amazon deal is a lot of money: it's worth chasing.

But there looks to be greed built into the US tax system, and the bureaucrats chasing yard sales have the sort of attitude that may be playing fast and loose with the legality of this affair.

(We have a personal duty-free allowance for imports, but be very careful the guy you buy from correctly declares books and other goods.)

[Chris C]

Taxes

I am a United States citizen, and for the record, I am *not* happy paying taxes (especially the 15.3% I pay into social security [I'm self-employed, so I pay both the employee and the employer portions], since the social security fund will be depleted by the time I reach retirement age). However, I understand it is a necessary evil in supporting the infrastructure, maintenance, and protection of this country. For now, let's hold off discussing the huge excesses and "pork" fed by our tax dollars.

"Suddenly having to pay [roughly] 8 per cent tax on 10 per cent of our sales would be a really bad trade off."

That sentence sums it up quite nicely -- Overstock doesn't want to pay 8 per cent tax. I don't blame them. But there's the nub -- *they* are not the ones who would be paying the tax. They would merely be collecting it from the purchasers at the time of purchase, then remitting it to the state (probably on a weekly or monthly basis). I don't like having to collect sales tax in my state, but since I voluntarily choose to sell products, I am obligated to collect sales tax on the sales of those products.

As for those non-US readers wondering why the state of New York wants online retailers to collect sales taxes for purchases made by New York residents, it's because legally, the tax must be paid on those purchases. While we often simply say "Sales tax", the full name is actually "Sales and use tax". Under the law, you are obligated to pay a sales/use tax on your purchases regardless of where you purchased them. If a retailer does not collect sales tax on your purchases, you are obligated to remit the appropriate use tax on your tax forms. As you might imagine, most people don't do this. That being said, it is the law. It's a bit like speeding -- most people at least occasionally drive over the posted speed limit, but that doesn't make the law any less valid.

[ratfox]

Agree with Amazon

Pretending that affiliates actually mean "presence in the state" is legal trickery, IMHO.

Also, the NY state is actually threatening them to retroactively ask for all the sales tax they should have collected in previous years - that is, when they already had affiliates in NY but when it was not yet considered "presence in the state".

Technically, the state should go after the buyers who didn't report their online purchase... But of course, those people vote.

[Smoovious]

@AC

> BTW what actually is a boondongle ? Is this an Americanism I am totally unaware

> of ... well thats just awesome dude.

> Mu

Google "bridge to nowhere"... that's a boondongle(boondoggle?)

-- Smoov