Sales Tax Initiative

Amazon.com, LLC, and Amazon Services, LLC, have filed a complaint in the Supreme Court of the State of New York that challenges the Internet Sales Tax provision in the state's budget. In a complaint filed on April 25, Amazon claims that the provision is "unconstitutional" because the statute "requires out-of-state Internet retailers, with no physical presence in New York, to collect sales and use taxes," as reported by Wired.

On April 15, Gov. David Paterson signed into law the Internet Sales Tax provision, as reported by Multichannel Merchant. The Internet Sales Tax provision requires out-of-state retailers such as Amazon.com to comply with New York State sales tax laws and to collect and remit sales tax on sales to state residents.

Last week, independent retailers in New York State scored a huge victory when the legislature passed a final budget that includes the Internet Sales Tax provision. While Gov. David Paterson is expected to sign the budget bill into law without any line-item vetoes, as of press time, he had yet to do so. Meanwhile, though experts expect there to be a legal challenge to the provision from the likes of Amazon.com or the Direct Marketing Association, no suit has been filed in court.

In what was a significant victory for independent retailers, on Wednesday, April 9, the New York State Legislature passed a final budget that includes the Internet Sales Tax provision. This means that out-of-state retailers such as Amazon.com now will be required to comply with New York State sales tax laws and collect and remit sales tax on sales to state residents. Gov. David Paterson has 10 days to sign the budget.

At press time, the April 1 deadline for the New York State budget had come and gone, and it was still unclear when Gov. David Paterson and the New York legislature would reach a final agreement. News accounts from Albany indicate that the Internet Sales Tax provision remains in the proposed budget; however, with negotiations still ongoing, no provision is guaranteed inclusion in the final document.

As New York State legislators returned to the capital following their Easter break, and the state's budget deadline of April 1 looms, the American Booksellers Association continued its lobbying efforts on behalf of the proposed Internet Sales Tax provision's inclusion in the final state budget.

Following up on letters sent by New York booksellers to their state legislators, on Wednesday, March 19, American Booksellers Association staff joined representatives of the Retail Council of New York in Albany, where they met with key legislators from both the Assembly and Senate in support of the Internet Sales Tax provision's inclusion in the final state budget.

New York State Assembly passes budget with Internet sales tax proposal

Even in a week when New York's capital was shaken by scandal and the daily workings of legislators were thrust into an unprecedented state of uncertainty, the New York State Campaign for E-Fairness continued to make important strides.

The American Booksellers Association continues to urge New York State bookstore members to voice their support for the Internet Sales Tax provision in Gov. Eliot Spitzer's proposed budget. To help in this important outreach, this week ABA is making available Op-Ed and Letter to the Editor templates that booksellers can adapt and send to local media.

On Wednesday, February 27, the American Booksellers Association called on member bookstores in New York State to voice their support for the Internet Sales Tax provision in Gov. Eliot Spitzer's proposed budget by writing to both their state senator and assemblyperson. If the budget is approved with the provision, out-of-state online retailers selling products in New York State will be required to collect state sales tax. The budget, which is due by April 1, will be debated by legislators throughout March.

This week, Amazon.com announced that it plans to fight New York Governor Eliot Spitzer's proposal to require online retailers with certain selling activities in the state to collect and remit sales tax for sales made to in-state customers, according to published reports. In response, on Wednesday, February 13, the American Booksellers Association reiterated its support for Governor Spitzer's action.

This week, North Carolina responded to the letter from the American Booksellers Association and seven other trade groups that called for the equitable enforcement of sales tax laws on online purchases. In addition, both Iowa and Tennessee sent second letters in response to ABA's follow-up letters that the association mailed on behalf of the independent trade groups.

To date, 15 states have responded to a letter from the American Booksellers Association and seven other trade groups that calls for the equitable enforcement of sales tax laws on online purchases: California, Hawaii, Indiana, Iowa, Kansas, Louisiana, Maine, New Mexico, New York, Ohio, Tennessee, Washington, Washington, West Virginia, and Wyoming.

On Tuesday, January 22, New York State Governor Eliot Spitzer announced that he is seeking legislative approval to clarify what constitutes nexus for online retailers selling to New York State residents. The provision, which is contained in the state's Executive Budget-Briefing Book, stipulates that online retailers that have certain selling activities in the state, such as Amazon.com, should be required to collect and remit sales tax for sales made in New York State.

What is "e-fairness"?