As a libertarian, I naturally lean towards limited government and minimal tax rates, but I have to give credit to New York state’s tax mongers for their creativity.
Although Congress has extended for seven more years the moratorium on taxing the internet, Albany thinks it has found a way around this inconvenience. The Supreme Court has ruled that mail order houses can be required to collect sales taxes only if they have a physical presence in a certain state. Amazon and other e-retailers often provide links to other sites in return for a commission on any resultant sale. New York incredibly claims that this is the equivalent of an actual salesperson or storefront and that, therefore, these sales are taxable.
When the New York Sun exposed this tax grab late last year, Gov. Eliot Spitzer buried the plan; he had, after all, made campaign promises not to raise taxes. The state’s Department of Taxation and Finance may try again, however, now that the spotlight’s been off them for a while. As budget director Paul Francis said, ” I don’t regard it as a tax increase. It’s only a tax increase to the person who is paying it.” “I couldn’t have said it better.