Madmallard
.223 Rem
New York state leads in many things: fashion, finance, food, media, museums — all of which helps attract people and businesses and creates the state’s vibrant and diverse economy. And yet, if Gov. Cuomo gets his way, New York will lead in another way: Enacting a foolish Internet-marketplace tax that’ll hurt the state’s attractiveness to businesses.
New York already collects taxes on Internet-marketplace sales — like those on Etsy, eBay and Amazon — when those sales occur between a New York seller and a New York buyer. It makes sense because these sales are essentially the same as the everyday transactions between New Yorkers that happen at any local brick-and-mortar shop.
What doesn’t make sense, however, is what Cuomo is trying to do now: Require Web sites to collect taxes on behalf of out-of-state sellers and New York-based buyers, as long as the marketplace has a presence in New York.
This senseless proposal sends a concerning message to Internet marketplaces and all tech companies that they may not be welcome here. Indeed, only two other states have passed similar taxes (both are tied up in litigation and haven’t been implemented): Alabama and South Dakota.
New York’s tech community sees two main ways the tax would hurt our state:
That’s not to mention the copycat states that will follow New York’s lead — as they usually do — and attempt to pass similar laws, creating a patchwork of requirements that will be difficult and cumbersome to comply with.
This is why most of the larger Internet marketplaces prefer a simplified national standard for remitting local taxes that would apply across states.
The state’s primary rationale for this tax, as usual, is that it needs the revenue. But if New York’s experience is anything like Alabama’s and South Dakota’s — and it likely will be — it won’t see that revenue for years while it faces expensive legal challenges.
Plus, according to a recent poll, 69 percent of New Yorkers oppose the tax.
More important, there are other ways to generate the needed revenue, even within the tech sector. Take, for instance, home-sharing — a growing industry that has created billions of dollars in economic activity in every corner of the Empire State.
How this tax could make NY a no-go for tech startups | New York Post
New York already collects taxes on Internet-marketplace sales — like those on Etsy, eBay and Amazon — when those sales occur between a New York seller and a New York buyer. It makes sense because these sales are essentially the same as the everyday transactions between New Yorkers that happen at any local brick-and-mortar shop.
What doesn’t make sense, however, is what Cuomo is trying to do now: Require Web sites to collect taxes on behalf of out-of-state sellers and New York-based buyers, as long as the marketplace has a presence in New York.
This senseless proposal sends a concerning message to Internet marketplaces and all tech companies that they may not be welcome here. Indeed, only two other states have passed similar taxes (both are tied up in litigation and haven’t been implemented): Alabama and South Dakota.
New York’s tech community sees two main ways the tax would hurt our state:
- It will dull New York’s appeal as a home for tech companies. Because it would only apply to marketplaces that have a presence in New York, it encourages new marketplaces to start elsewhere and existing companies to grow elsewhere.
- Complying with such a tax is a heavy operational burden for companies. Tax codes are incredibly complex. Rates vary by the buyer’s location, what they purchase and even the day of the year.
That’s not to mention the copycat states that will follow New York’s lead — as they usually do — and attempt to pass similar laws, creating a patchwork of requirements that will be difficult and cumbersome to comply with.
This is why most of the larger Internet marketplaces prefer a simplified national standard for remitting local taxes that would apply across states.
The state’s primary rationale for this tax, as usual, is that it needs the revenue. But if New York’s experience is anything like Alabama’s and South Dakota’s — and it likely will be — it won’t see that revenue for years while it faces expensive legal challenges.
Plus, according to a recent poll, 69 percent of New Yorkers oppose the tax.
More important, there are other ways to generate the needed revenue, even within the tech sector. Take, for instance, home-sharing — a growing industry that has created billions of dollars in economic activity in every corner of the Empire State.
How this tax could make NY a no-go for tech startups | New York Post
