Overstock Cuts Off NY Affiliates Over NY's Amazon Sales Tax Law

from the nice-work,-New-York dept

Last month we wrote about how New York was changing a law to try to force Amazon to collect and pay sales tax in New York by defining any affiliate in the state as being an Amazon point of presence. This is a clear perversion of the intention of the law that only requires collecting sales tax if the company has a physical presence in the state. While Amazon is now fighting this law in court, others are taking more drastic measures. E-commerce site Overstock.com has declared that it will no longer allow New York affiliates in order to avoid having the state consider it to have a “physical presence” there. This would be an unintended consequence of such a law. In an effort to get e-commerce providers to cough up more in taxes, not only will Overstock not be paying those taxes, it just made life a lot more difficult for thousands of Overstock affiliates in New York.

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Companies: amazon, overstock

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Comments on “Overstock Cuts Off NY Affiliates Over NY's Amazon Sales Tax Law”

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23 Comments
Anonymoussays:

This sort of action pleases me greatly.

States think they can unfairly bilk people on sales taxes like this and that it will reward them in the end. The truth is that people will simply stop buying things and they’ll dick the economy over in the long run.

Right now, I buy everything I can over the internet. I use Amazon’s premier service (I buy a LOT of stuff from them – probably $15k per year just from Amazon alone).

If I had to start paying taxes on everything I bought? I would simply stop buying things. Period. I would wait until I visited my home town of Portland Oregon and buy everything tax free and in person.

JBsays:

Money Swirls Around the Economy

New York will lose income taxes due to reduced income for these affiliates.

Taken to the extreme, these affiliates spend their income in the state, and now other NY businesses will have reduced revenue, so those businesses and their employees will also pay less income tax to the state.

End result: the state will STILL collect no sales tax on Overstock purchases, but they also cut their income tax receipts as well.

Bucknuttysays:

God I hate New York. We get creamed on sales taxes, property taxes, income taxes and gasoline taxes. We pay the highest fees for bridges and tunnels and forget about parking a car unless your willing to shell out $50 a day. Now we can’t buy online without NY taking a cut. All that tax money to pay a corrupt and dysfunctional state government. It really sucks

barrysays:

OVERSTOCK SAYS NY STATE IS BACKING DOWN

According to their most recent earnings report, they said that NY state will reverse themselves since it will cost them so much to fight it in court. You can read the entire transcript here with the link going directly to the part of interest:

http://seekingalpha.com/article/85766-overstock-com-inc-q2-2008-earnings-call-transcript?page=-1&find=new+york

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