Friday, April 25, 2008
I Fought the Tax Law, but the Tax Law Won
So the big news in e-tail this month? New York plans to start enforcing their sales tax on internet purchases.
The nerve...
Technically, New Yorkers are already supposed to line-in internet purchases on their annual tax form and pay the sales tax voluntarily. And many of them do--last year this brought in $45 million. But it's estimated that over $100 million went unreported. So the new law, the so-called Amazon Tax, forces e-tailers doing over $10,000 worth of annual business with NY to collect sales tax on all purchases going to the Empire State. There are a few problems I foresee:
For starters, we have no idea if we're going to do $10,000 worth of business with New Yorkers or not. We very easily could--50 Mini-MT's at $199.99 a pop would put as at $9,999.50. So if we were to sell 51 devices, or 50 devices and, say, a toothbrush, we'd have to have collected sales tax that year. Actually, there may be provisos for this written into the law--maybe you collect based on projections from the previous year, or maybe they're hoping most e-tailers will opt in so they can err on the side of caution. I'd love to know for sure, but I've been having all manner of trouble finding details on this law, even such mundane trifles as the goes-into-effect date have thus far eluded me.
Second, New York state doesn't have one sales tax. It has 30! And it's a small state, geographically speaking. If other states follow suit (and they want to), then we're looking at hundreds, nay, thousands of distinct sales tax rates that need to be applied and collected and then mailed to 46 different locations (if not every single municipality). So you have the added administrative burden on top of that.
But there's a bigger question to consider: is this law even legal? Can a New York law actually effect a company based in Missouri like, say, for example, I dunno, us!?!?!
We'll see. Something tells me Amazon will go ahead and start charging the tax while it's lawyers fight the good fight behind closed doors. As for the rest of us? Well, we'll get this all sorted one way or another. No one likes being buried in paperwork, but no one wants a cell next to Wesley Snipes either.
Have a good weekend.
The nerve...
Technically, New Yorkers are already supposed to line-in internet purchases on their annual tax form and pay the sales tax voluntarily. And many of them do--last year this brought in $45 million. But it's estimated that over $100 million went unreported. So the new law, the so-called Amazon Tax, forces e-tailers doing over $10,000 worth of annual business with NY to collect sales tax on all purchases going to the Empire State. There are a few problems I foresee:
For starters, we have no idea if we're going to do $10,000 worth of business with New Yorkers or not. We very easily could--50 Mini-MT's at $199.99 a pop would put as at $9,999.50. So if we were to sell 51 devices, or 50 devices and, say, a toothbrush, we'd have to have collected sales tax that year. Actually, there may be provisos for this written into the law--maybe you collect based on projections from the previous year, or maybe they're hoping most e-tailers will opt in so they can err on the side of caution. I'd love to know for sure, but I've been having all manner of trouble finding details on this law, even such mundane trifles as the goes-into-effect date have thus far eluded me.
Second, New York state doesn't have one sales tax. It has 30! And it's a small state, geographically speaking. If other states follow suit (and they want to), then we're looking at hundreds, nay, thousands of distinct sales tax rates that need to be applied and collected and then mailed to 46 different locations (if not every single municipality). So you have the added administrative burden on top of that.
But there's a bigger question to consider: is this law even legal? Can a New York law actually effect a company based in Missouri like, say, for example, I dunno, us!?!?!
We'll see. Something tells me Amazon will go ahead and start charging the tax while it's lawyers fight the good fight behind closed doors. As for the rest of us? Well, we'll get this all sorted one way or another. No one likes being buried in paperwork, but no one wants a cell next to Wesley Snipes either.
Have a good weekend.
Labels: current events
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