The passage of New York's so-called "Amazon Tax," bill, which would force e-tailers to collect sales tax from New Yorkers making purchases, has since been signed, as it set to go into effect on June 1st, bringing in an estimated $50 million in revenue this year and $75 million in 2009.
New York has begun notifying etailers to ensure they are aware of the new rules.
Prior to this, retailers had to have a brick-and-mortar presence in a state to be required to collect sales tax. The argument has frequently centered on the huge number of different sales tax rates across the country. It is also difficult to see how something like this isn't going to face legal challenges. In fact, in a 1992 Supreme Court decision, Quill vs. North Dakota, the Supreme Court ruled that out-of-state retailers cannot be required to collect sales tax on purchases sent to states where they did not have a physical presence.
"The Supreme Court’s reasoning was at least partially based on the fact that, at the time the case was decided in 1992, there were over 6,000 separate sales and use tax jurisdictions in the United States (states, localities, special tax districts, etc.) and to impose a collection obligation on a remote seller would impose a crushing burden that would severely restrict interstate commerce."
Now there are over 7,000 different sales tax laws, and while it should be easy for an entity as large as Amazon.com to handle that, the law affects companies that do more than $10,000 worth of business in the state. That's not that much business, and could force smallish etailers to have to handle this confusing maze of laws.
You can bet Amazon.com and other large etailers will challenge this, using that $10,000 limit as ammo. Being from a high sales-tax state as I am (California), I certainly am not eager to see this law be successful - but I also am not foolish enough to believe something like it won't eventually take shape across all the states.
Source: Tech Ex
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