Governments are going to really struggle with this as it is possible to send orders from any “source” location to avoid the tax in the recipient location.

It does however occur to me that the small retailers should look at the “floral” selling model of delivering product via the local store. If the get together, like flowers they could compete against the bigger companies.

I support Amazon’s endeavor, after all, we are living in the 21st century!

Bingo !

I work for a “small” online reseller in Ohio with no nexus in California, yet because of our volume of business in the state we must collect sales tax for all California transactions. That alone has cost hundreds it not thousands of dollars in overhead in the form of modifications to our e-store, our quoting systems, additional accounting fees, etc.

If NY were to enact a similar policy and this trend were to continue to other states I am confident that we would survive, however I can see that it would be a lot harder for new startups to make it as far as we have.

Of course, with the Supreme Court’s Quill precedent, they lose thanks to the even larger issue of unduly burdening interstate commerce. But that would completely go away if the states were to get together and simplify and streamline and consolidate their sales tax regimes — something that the Streamlined Sales Tax project fails to accomplish.

As a resident of the state of New York, my biggest concern is about online microbusinesses here. Because if this budget move were to survive Amazon’s judicial challenge, I can easily envision that the smaller companies (particularly nonemployers) will opt to refuse to accept affiliates based here because that gets them out of having nexus here. At that point, it will be in-state microbusinesses that will be losing money. I think that sucks.

I think that the state government thinks the $10,000 minimum is a sufficient small business exclusion that they won’t be hurting the little guys. And that might be true if all you’re talking about is book retailers. Small businesses that sell larger ticket items could hit that $10,000 in sales in NY a lot faster, though. I have a hunch that the target here was Amazon and, as usual, nobody was there to speak for smaller online retailers.

You point out something important and I’d like to address it. Yeah, I didn’t talk about what consumers are supposed to do when it comes to paying taxes — I did not want to muddy the waters. Because I do not think that is the issue here.

The issue here is: can a state force an out-of-state business to become its tax collection arm? That is the question we’re talking about.

And the reason I think it’s much more burdensome an issue for out-of-state businesses than for in-state businesses, is due to the burden of complying with so many different tax jurisdictions.

In the end, it’s the U.S. Constitution that applies — The Commerce Clause, Article !, Section 8.

If Congress wants to change the Constitution, it should pass a Federal law constitutional amendment. But why should one state, acting on its own, be able to unilaterally make a change that impacts everyone and attempts to override the U.S. Constitution? See, that’s the part that I go back to.

I don’t cry any tears for Amazon, because it’s rolling in dough and as a huge company can afford to collect and remit taxes better than most. But I’m pulling for Amazon in this case simply as a proxy to fight the battle those of us without deep pockets can’t fight.

The bookseller wars (small local bookstores against Amazon) have been going on for years. I actually feel more sympathy for small local booksellers than my article would suggest, because I know people’s livelihoods are on the line.

But I don’t think this move will change a thing when it comes to consumers deciding where to buy. The Internet market forces are too large and too deeply ingrained, and consumers’ shopping behavior has changed too much, for this one thing to make a difference.

It’s not just the lack of taxes on Internet purchases that is changing retail: it’s consumers’ expectations about wide choice and comparison shopping; it’s about malls and shopping centers with high rents; it’s about the faster pace of life; it’s about big retailers having economies of scale that enable lower prices than smaller retails can ever hope to offer.

Shopping is a complex thing and doesn’t come down just to price. There will always be those who want to shop in person in a store for certain things, regardless of price or taxes. I regularly go to physical bookstores when I want to pick up a few books to read, because I like the physical act of flipping through books and reading a few pages to see if it suits my style. I can’t do that online. Paying taxes on a couple of paperbacks makes not a bit of difference to me. Nor do I bother running all over town to see if I can save a buck or two on the paperbacks somewhere else — my time is more important to me. But I also shop on Amazon for books as gifts (due to wish lists and wide selection and return policies) — for gifts, Amazon is my top choice.

And the reality is, New York doesn’t give a hoot about local booksellers or retailers either — that’s just a convenient excuse. If New York officials really cared, they would have taken action much earlier and done more than approach it from a tax revenue measure.

This is a tax revenue grab by the state of New York — pure and simple.

It’s part of a much larger trend, affecting all kinds of taxes, where state officials are getting super-aggressive in going after out-of-state businesses. This is just the tip of the iceberg. A lot more small businesses are going to get hurt by the states’ aggressive action if Congress does not put on the brakes to states that impede interstate commerce.

Anita

What you don’t note and that is contrary to popular belief is that consumers are STILL required to pay a usage tax on items purchased online, if the retailer does not collect a sales tax. It’s easy to leave that part out because I’ve never met anyone who did not totally ignore this tax requirement. But, technically, if you purchase something outside of your state and do not pay a sales tax in the state from which you are purchasing it, you are technically required to pay your state’s usage tax.

Obviously, that makes us all cheats, as it is, in effect a “voluntary tax” that no one voluntarily pays.

The government knows the easiest taxes to collect are those that are “hidden” in our wages and purchases. While small business owners know what it’s like actually write a check for the “payroll” portion of taxes and to pay taxes with a check quarterly, most individuals pay most tax in the form of withholding or as part of a transaction such as a retail purchase or an add-on to their monthly mortgage payment.

So, while I personally — as a consumer — always seek the lowest price and avoid sales tax whenever possible, I also recognize that such an incentive is, in effect, being granted by my state (because of a Supreme Court decision) to the out-of-state retailer. And even while I take advantage of it, I must admit that it encourages me to purchase an item online rather than down the street where my neighbors work and where such a purchase would support the schools and parks and infrastructure of the place where I live and work, as well.

While I can argue either side of this issue, I’ve come to accept it’s not necessarily a “small business” positive one.