You know how if you live in most states in the US you don't have to pay sales tax on items purchased online? Yeah, that's about to change for about 19 million residents of New York State. Legislators have approved a bill that requires large online stores to collect sales tax for anything shipped to New York. Technically, the tax isn't new. Consumers were supposed to be reporting these purchases on their tax returns all along, but nobody really does. The law just passes the burden from consumers to retailers.
While the bill doesn't become a law until Governor David Paterson signs it, he's expected to do so soon, as the measure is expected to raise $50 million and help balance the state budget.
Companies that collect less than $10,000 per year from sales to New Yorkers will be exempt. But something tells us that means you'll be paying taxes on purchase from large stores like Amazon.
Update: As we've reported in the past, this law wouldn't require all online stores to charge tax, but only online stores that do some form of business in New York State. And that business can include something as simple as operating an affiliate link program that lets New York residents make a few bucks by linking to Amazon products on their web pages. Former governor Eliot Spitzer had proposed the law late last year, but we had thought it was dead -- until yesterday. While it's possible that one outcome of this law could be businesses pulling out of New York altogether, a much more likely outcome would that Amazon and other companies with affiliate programs could refuse to let New York citizens sign up for affiliate accounts.
