New York Prepares for Its "Amazon Tax"
New York Internet shoppers, take note: in five weeks, sales tax-free shopping will end on many Web sites thanks to rewritten state rules that are trying to force Internet retailers to collect.
At Chrono Tech Watches in White Plains, Jerry Nally is glad the clock is ticking on many Internet retailers that don't charge New York sales tax. Nally says those so-called "e-tailers" steal his customers.
"They'll come in our store, look at our product, touch it, play with it, look at the warranties, then go back to the web and buy it tax free," says Nally.
The fact of the matter is, it's not just about being tax-free; prices are frequently lower on the Internet. However, the additional percentage bonus of no sales tax just adds to the advantage of etailers. Will this fly? In a 1992 Supreme Court decision, Quill vs. North Dakota, the Supreme Court ruled that out-of-state retailers cannot be required to collect sales tax on purchases sent to states where they did not have a physical presence. You can bet there will challenges to this.