Here he goes again.
The governor of New York State, where we already have the dis-honor of paying the highest taxes of any state in the nation, has enacted a new decree.
We must now pay NYS sales tax on all of our Internet purchases, regardless of where the retailer is located.
Just like the driver’s licenses for illegals scheme, this was done without prior disclosure, by executive fiat.
It goes into effect in two weeks — December 1, 2007.
Here’s a little background from the NY Sun article:
Having pledged not to raise taxes, Mr. Spitzer is increasingly scrounging for ways to close a projected $4.3 billion deficit next year. State officials estimate that this latest initiative, which goes into effect in December, will bring in about $100 million more each year, split between state and local government tax revenue. Statewide, the sales tax averages about 8%, although in New York City it is 8.375%.
During this year’s budget debate, Senate Republicans and business groups labeled many of Mr. Spitzer’s revenue-raisers as tax hikes, while Mr. Spitzer insisted he was simply closing loopholes.
So. It’s not a new tax. It’s “closing a loophole.”
When it comes to charging sales tax, e-retailers have been held to the same old standard that the U.S. Supreme Court set for mail-order vendors: The seller only needs to collect the tax on purchases in states where the vendor has a physical presence, such as a storefront or salesman. New York is saying that it has found a way around that obstacle to tax collection. Many e-retailers may have unwittingly lost their exemption because of the way they direct traffic to their Web sites, according to a tax memo recently released by the state’s tax department.
At issue is the “affiliate program” used by many e-retailers. Web site operators can provide a link to an e-retailer in return for a commission on any sale resulting from customers using the link. While the affiliate program may consist of little more than a non-descript advertisement on the computer screen, the tax consequences may be huge: New York state says it is the equivalent of having an instate salesperson.
You know what? When Spitzer was State Attorney General, he could pull of his pseudo populist schtick because, when it came down to it, the average New Yorker couldn’t really feel the consequences.
But now his actions affect us. They offend our sense of fairness and decency. They take money out of our wallets.
I hope reaction to this is on par with reaction to the driver’s license debacle. He needs to understand that raising our taxes is neither good governance nor good politics.
Got a $4.5 billion deficit?
The same way I cut my spending when my salary doesn’t cover my expenses.
It ain’t rocket science, Eliot.
[tags] Eliot Spitzer, Internet tax [/tags]