State Sen. Martin J. Golden (R-Bay Ridge, Dyker Heights, Bensonhurst, Marine Park, Gerritsen Beach, Gravesend, Manhattan Beach) and Assemblywoman Nicole Malliotakis (R-Bay Ridge, Staten Island), spoke out today against an internet sales tax proposal expected to add an additional burden on New Yorkers entrepreneurs who sell items – as well as consumers that purchase products – via the internet.
The bill will require online providers with distribution centers in New York and at least $100 million in sales nationwide to collect state and local taxes on purchases by New York residents.
“As we all know, the digital market place has revolutionized how we buy and sell products. Placing a tax on items sold in the digital marketplace will have an adverse impact on internet consumers and businesses,” said Golden.
“This tax will send a message to digital companies that New York is closed for business I have worked tirelessly with my colleagues to pass legislation to attract new and emerging online marketplaces to conduct business here in New York. We need to make New York a state where the digital market place is embraced, nurtured and protected to ensure our economic prosperity,” he added.
This tax would include all purchases by state residents, regardless of whether the seller using the marketplace is in New York State. The proposal also includes reporting requirements for marketplace providers who are not required to collect sales tax and for sellers with receipts from New York purchases of more than $5 million. Sellers or marketplaces who fail to comply with the reporting requirements will be subject to a fine.
California-based eBay, which facilitates consumer-to-consumer and business-to-consumer sales through its website, also added their voice against the proposal.
“As one of the first internet marketplaces, eBay has worked to empower economic growth opportunities for New York’s small, internet-enabled businesses and entrepreneurs and to bring great value and selection to New York consumers. The opportunity to expand the markets of small businesses should be championed by policy makers, not hampered by punishing regulation and increased tax burdens for New Yorkers,” said eBay in a statement.
This internet sales tax is merely an attempt to force the state’s working class to subsidize the governor’s reckless budget spending,” said Malliotakis. “States like Massachusetts and Maine have attempted to enact similar taxes in the past and have failed miserably, resulting in costly lawsuits that New York cannot afford at this time. Forcing New Yorkers to pay state and local taxes at the time of purchase would result in unfair increases in item costs statewide. These taxes would also allow the government to retain lists of names and addresses of those who used a marketplace, which is a blatant intrusion on our privacy.”
TechNet, a lobbying firm representing public policy interests for technology issues and which promotes the innovation economy across the 50-state public legislative landscape said a patchwork, state-by-state approach is simply not good tax policy, and an issue that should be resolved at the federal level.
“The Marketplace Sales Tax, having already been defeated in two previous years, would make online shopping more expensive and push new innovation and startup tech companies out-of-state. The proposal sends a clear signal to existing and emerging online marketplaces: doing business in New York will be more expensive and more complex,” said TechNet Northeast Executive Director Matt Mincieli.
“We appreciate all the governor and the legislature have done to help the tech industry thrive, but this proposal runs counter to all those efforts,” he added.
