The Amazon Tax…

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As you’ve probably read, the state of New York has adopted a so-called “Amazon tax” effective 06/01.  While it is unconstitutional for states to force a company to collect sales tax on items that are being being shipped to a state in which the company has no physical presence, NY has taken the novel position that since Amazon has advertisers based in NY it is required to collect the tax.

Amazon is challenging this constitutional interpretation in court now.  The ramifications of the outcome are massive.  If Amazon fails, then without a doubt states across the nation will adopt similar online purchase taxes.

Although it was adopted in order to grab a slice of the Amazon pie, many other companies will wind up having to charge tax to New Yorkers.

Overstock.com has taken the opposite move.  They have terminated all relationships with NY based advertisers in order that they can continue to ship items to NY tax-free.  They have even had to terminate their coupons in the Entertainment book, due to fears that advertising in Entertainment would force them to charge New Yorkers sales tax!

It should be interesting to see how other companies react to the new law…

At any rate, here is the new Amazon policy:

Items Shipped to New York State
Effective June 1, 2008, Amazon.com LLC will begin collecting sales tax on items shipped to destinations within the State of New York as New York has enacted a new law requiring out-of-state sellers to collect and remit sales tax based on advertising. Amazon has filed a lawsuit challenging the constitutionality of this provision. However, as required by the law, we must still begin collecting New York sales tax beginning on that date.

Please note that if you place an order prior to June 1, 2008, your Order Total may not include an estimate of New York sales taxes, but those taxes may still be charged if your order is readied for shipment on or after that date.

Tax-Exempt Customers

If tax has been charged on any portion of your order and you need to take advantage of your tax exempt status, the process will differ depending on the merchant who sold the taxed items.

If the taxed items were sold by any of the following merchants, Amazon Customer Service can facilitate a refund.

  • Amazon.com LLC
  • Amazon Digital Services, Inc.
  • Borders Teamed with Amazon.com, Inc.
  • Target.com/ITC

If the taxed items were sold by any other merchant, please contact that merchant directly using the contact information provided in the merchant’s Contact Customer Service section.

In those cases where Amazon.com can facilitate a tax exempt refund, you will need to provide us with acceptable proof of exempt status for the state where the items will be shipped.

How to submit this information

First, place your order through our Web site. After you’ve placed your order, please submit the necessary information by fax in order to receive a refund of any sales tax. Our fax number is (206) 266-2005.

Please include the following:

  • Your order number (17 digits in this format: XXX-XXXXXXX-XXXXXXX)
  • E-mail address
  • Acceptable proof of your exempt status (as outlined above)
  • The name of the merchant who sold the items
  • The name of the organization that purchased the items
  • Mark your fax “Attn: Amazon Tax Exempt”
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10 Comments On "The Amazon Tax…"

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motty

newegg.com too will start charging tax to new yorkers starting June 1

Yanky

I ordered some books the other day and I got a similar message before I placed the order. I thought it strange, and that it would not apply to me because we still have a full business week of May left.

Anyhow, I received an email saying that the order won’t be ready to ship until June 9th. Strange I thought, so I went to cancel the order because I found the books cheaper on BN.com anyway. The usual cancellation method that Amazon conveniently has seemed to have been disabled, because it said that my order was already being processed- despite a June 9 expected shipping date.

Dan/Ctownbochur

I’m quite certain that if tax is charged for orders made before 06/01 that Amazon would be willing to give goodwill credits to offset the tax if you call them up…
Amazon will do pretty much anything to keep you as a happy customer.

Yossi

a bunch of mamzeirim…

David Sternlight

People misunderstand the sales tax. It is a tax on the consumer, who receives State services, not on the vendor. If it were a tax on the vendor he couldn’t pass it on explicitly, but would have to take account of it in pricing.

The only reason it isn’t charged by many out-of-state vendors is that if they have no presence in the State, they are outside the jurisdiction of the State under the Constitution. The State can require you to pay it directly to the State if they wish, and get you if you don’t. It’s a loophole, folks; you aren’t paying your fair share of State services if you buy out-of-state from a vendor with no State presence.

States may have been looking the other way on the “infant industry” argument. Now that Internet commerce is well and truly grown up, paying one’s State sales taxes is an obligation of citizenship.

I don’t say I like it; nobody likes to pay more than they have to. But there it is.

Dan/Ctownbochur

@David Sternlight:
That’s all good and true, but the fact remains that it’s unconstitutional for a state to force a company to collect the sales tax unless they have a physical presence in the state.

Marty

I received an email this morning from Newegg.com saying that as of Jun 1st they too will Collect NY Sales tax.

R

I wonder how much business Amazon (and other major e-tailers) will lose because of this…

501c3

any way to have them note on my account that it is tax exempt?

Mendel

@Yanky:

they always do that now, showing that the order is processing, call them and if it’s not really processing than they will be able to cancel, and if it is really processing that your books will be shipped out before June 1st

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