A really good way to take money out of New York State

New York judge OKs Amazon Tax • The Register

“In the end, the Commission-Agreement Provision does not broadly tax any and all Internet sales to New York consumers,” she wrote in her ruling. “It requires a substantial nexus between an out-of-state seller and New York through a contract to pay commissions for referrals with a New York resident along with realization of more than $10,000 of revenue from New York sales earned through the arrangement. The neutral statute simply obligates out-of-state sellers to shoulder their fair share of the tax collection burden when using New Yorkers to earn profit from other New Yorkers.”

The dismissal of the Overstock case was based on the ruling Judge Bransten made in the Amazon case. It is fairly certain that both Amazon and Overstock will appeal these rulings. If they decide to, they will take up their cause with the New York State Supreme Court Appellate Division, and then it would go up higher to the New York State Court of Appeals. Because it is a constitutional issue, it could in theory get to the U.S. Supreme Court.

It sounds as if the judge has a pretty solid grasp of what this law says, but golly gee it sounds like a stupid law, written by someone who has never bought anything from Amazon or Overstock.

When I buy something through an Amazon affiliate, I’m doing it because that directs a portion of my sales dollar to the person whose web site I’m visiting, at no cost to me. With the new law, the cost of my transaction goes up by the amount of the state sales tax. If I’m scrupulously honest, my loss is only the amount I would have gained in interest by keeping that money in the bank until it was time to pay taxes; if I’m not so scrupulously honest, as so many purchasers of shipped goods aren’t, it’s the whole amount of the tax. In either case, why should I buy whatever thing it is through the affiliate site when I can pay less by clicking a couple of times and buying it through Amazon directly?

So if this law ultimately gets enforced, the result will mostly be that new yorkers who direct other new yorkers to Amazon and other sites with affiliate programs will lose money, while the state’s tax receipts stay pretty much the same. Whee.


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