Paul L. Caron

Thursday, July 23, 2009

CBPP Embraces New York's "Amazon Tax"

Amazon_logo The Center on Budget and Policy Priorities has released New York’s “Amazon Law”: An Important Tool for Collecting Taxes Owed on Internet Purchases, by Michael Mazerov:

The inability to collect all sales taxes that are legally due on purchases made over the Internet costs states billions of dollars a year in lost revenue. In 2008, New York State enacted an innovative law that helps to address this problem. Rhode Island adopted a similar measure this year. All states with sales taxes should give serious consideration to doing so as well.

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California has a state assemblywoman who has proposed adopting the so-called "Amazon Tax" in CA. Amazon has said that if it happens, they will pull all their ads that they currently have with small-time "affiliates" to avoid nexus.

Despite avoiding having nexus with the state, I still think that internet sales should be taxed, since we're all supposed to be reporting use tax anyway, and no one does.

I'd like to hear an opinion from someone with more tax knowledge than me--what would it take to change the law to be able to tax internet sales when the store doesn't have nexus with a state? Can we redefine nexus to include shipping something to a state? Should we?

Posted by: GJELblogger | Jul 23, 2009 2:43:25 PM