November 22 – November 29, 2007 Edition

NY Governor
Abandons Online
“Amazon Tax”

NEW YORK, NY/11/16/07–New York Governor Eliot Spitzer yesterday abandoned  the so-called “Amazon Tax” that  would  have required and other online retailers to charge state and local sales taxes on all purchases from New York, according to a report in The New York Sun. The move would have required New York City consumers to pay an additional 8.375% on many goods. And some say Spitzer may try to impose the tax sometime next year. 

“Governor Spitzer believes that now is not the right time to be increasing sales taxes on New Yorkers,” Mr. Spitzer’s budget director, Paul Francis, said in a statement. “He has directed the Department of Tax and Finance to pull back its interpretation that would require some Internet retailers that do not collect sales tax to do so.”

On November 15, the American Booksellers’ Association CEO Avin Mark Domnitz sent a letter to New York State Governor Eliot Spitzer on behalf of New York-based independent booksellers decrying the governor’s decision to drop the plan which they say enforces existing sales tax laws.

In the stunning reversal, Governor Spitzer decided that out-of-state online retailers with nexus in the state will not have to collect sales tax, at least for the time being.

Domnitz said in his letter to Spitzer that the ABA is “surprised and disappointed to read of Spitzer’s decision “to abandon plans to equitably enforce existing tax laws by requiring out-of-state retailers.” He pointed out that a November 9 memorandum from the New York State Department of Taxation and Finance “made clear that online retailers with affiliates in New York are required to collect and submit sales tax. This is clearly existing state law — not a new tax of any kind. . .”

The announcement on the tax issue came only  hours after Mr.Spitzer said he was dropping his plan to allow illegal immigrants in New York to obtain driver’s licenses.