NYLON – The Retail Council of New York State is urging state Legislature’s leaders to close the ‘Marketplace’ sales tax loophole as state budget negotiations move forward.
A press release from the Retail Council included a letter they sent to NYS lawmakers explains that a Supreme Court decision made in 1992 doesn’t mention explosive ‘internet’ and ‘e-commerce’ elements in today’s business environment.
The entire letter to state legislators is as follows:
Dear Legislative Leaders:
The Retail Council of New York State writes today on behalf of its thousands of member stores large and small — brick-and-mortar and actively engaged in e-commerce — in support of the 2018-19 Executive Budget proposal that would require online marketplaces with more than $100 million in annual sales to collect and remit New York’s state and local sales and use taxes on merchandise shipped in to the state from out-of-state sellers. This is neither a new tax nor a tax on the Internet. It reaffirms current state law, which requires New Yorkers to pay the sales and use tax on tangible personal property from an out-of-state merchant. The ‘marketplace’ proposal simply fills a loophole that today disadvantages brick-and-mortar Main Street merchants in every Senate and Assembly district in the state – the same merchants who give good jobs to hundreds of thousands of New Yorkers, support community activities, and give our communities their local color, flavor, vibrancy, and life. The Supreme Court’s 1992 decision in Quill v. North Dakota doesn’t even mention the words ‘internet’ or ‘e-commerce.’ Neither existed at the time, but Quill, which protected the mail-order retail sector’s then-$180 billion annual sales, created the tax shelter under which e-commerce soon exploded.
E-commerce today commands sales of some $6 trillion.
That’s a mere 25 years after Quill, and a decade after New York’s bipartisan, landmark ‘click-through nexus’ law that opponents promised would irreversibly chill e-commerce and fail constitutional muster. New York’s law survived legal challenges all the way to the Supreme Court and was replicated in nearly two dozen states.
E-commerce also has survived pretty well since that 2008 promise of certain death and, today, is huge and robust, agile and smart, and well past any claim of fragile infancy that needs a tax shelter to survive to sell another day.
The captioned proposal nonetheless provides for would-be start-up ‘marketplace’ platforms by capturing only those sellers pushing at least $100 million in annual sales. Any start-up Main Street brick-and-mortar merchant would jump at the chance to have even the briefest of periods of grace from collecting sales and use taxes from its customers – but no store can open for business until it has in hand its certification as a sales tax vendor.
New Yorkers, as shoppers, owe sales and use taxes regardless of whether they are collected at the point of sale. Certainly giant businesses with more than $100 million in sales are able easily to collect and remit sales and use tax on behalf of the third-party sellers from which they derive significant revenue. The states of Washington and Pennsylvania already have enacted without controversy ‘marketplace’ collection proposals similar in nature to that which we support in New York State; marketplace platforms such as Amazon already are able to comply with those statutes.
Our brick-and-mortar members today use the Amazon Marketplace and similar platforms to get their products in front of potential customers around the world. The Marketplace is a valuable and valued tool that, for New York State’s Main Street, would be made even more so through the simple principle of fairness applied through this proposal.
The Main Street retailers in your districts support this proposal. We look forward to your respective conference votes supporting your Main Street retailers.
President and CEO
Retail Council of New York State
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