New York Times Urges More States to Pass E-Fairness Legislation

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On Friday, November 27, the New York Times' lead editorial urged other states that collect sales tax to follow New York's example and pass e-fairness legislation. The Times said that legislators made the "right decision" when they clarified sales tax laws to require remote online retailers with affiliates in New York to collect and remit sales tax in the state, and added that "other states would be wise to look to New York as a model."

Online retailers who do not collect sales tax enjoy a significant and unfair advantage over rivals who must add the tax to their prices, the Times said, and explained: "They also cost the states billions of dollars a year in lost sales tax revenue -- money that cash-starved states cannot afford to forgo."

Pointing out that the 1992 Supreme Court ruling that it would be unduly burdensome for retailers to collect other states' sales tax was handed down before online shopping became so widespread and technology made the collection process easy, the Times stated: "The New York law sets things right. It turns out that Amazon and other retailers make wide use of in-state affiliates to promote sales. These are generally local businesses and nonprofit organizations that place links on their websites to the retailers' sites and receive a commission when someone clicks through."

In conclusion, the Times stressed, "Fairness demands sales tax collection by all online retailers -- to the level the competitive playing field, to ensure that tax law is administered consistently, and to distribute the overall tax burden more progressively."

This past year, two states, North Carolina and Rhode Island, passed e-fairness laws similar to New York State's law.