Apparently “everything changes on Day 1” referred only to Spitzer’s campaign promises. Remember when Eliot promised repeatedly not to raise taxes? Well, he’s at it again.
If you plan to do any Christmas holiday shopping on the Internet, better get it in before November 30. On December 1, the Spitzer administration is going to start forcing Amazon.com and many other online retailers to collect sales tax on purchases originating in New York State.
As most everyone knows, in cyberspace you only have to pay sales tax when the retailer has a physical presence in your state. So, for example, I have to pay 8.375% sales tax on electronics purchased from BestBuy.com, but not from Amazon, because Best Buy has brick-and-mortar stores here.
Now, Spitzer is claiming that any Internet retailer with an affiliate program — and at least one affiliate residing in New York — has a “physical presence” in New York and must collect sales tax on all New York sales. In other words, if you put an Amazon link on your personal site that gets 50 hits on a good day and you live in New York, you are the physical embodiment of Amazon in the Empire State. And it’s not just sales originating from the affiliate sites that are subject to sales tax. Once that physical presence is established, all sales from New York for that web retailer get taxed.
State officials estimate the new policy will bring in $100 million in new tax revenues each year. Of course, the masters of Doublethink also insist it’s not a tax increase.
UPDATE: Just minutes after uploading the post above, I read that Spitzer is backing down on this Internet sales tax scheme… for now. Apparently his aides were worried the Republicans would talk mean about him again, like they did with the driver’s license thing. The steamroller has become the steamrolled.