Traditionally online shoppers have not had to pay sales tax if the online merchant they are buying from did not have a physical presence in their state. New York State has recently passed a law that attempts to change this for New York residents. The new law specifically targets online merchants that use New York based affiliates to help them sell products. Though these New York affiliates (deal sites, price comparison sites, etc.) are not owned or operated by the merchant, the new law treats them as if they were, thus forcing a sales tax assessment.
Dubbed "The Amazon Tax" this new law seeks to fill what some legislators have for years called a sales tax loophole. This so called loophole has allowed online merchants to avoid the complications of charging and paying state sales tax. Over the years this has benefited companies like Amazon.com, Overstock.com, and many more by providing incentive for customers to make online purchases instead of in store purchases. Plus online shoppers have saved a bundle by not paying state sales tax when buying from these merchants.
What does this new law mean for New York online shoppers? Well, New Yorkers will immediately start paying New York sales tax at online stores that have previously not charged them sales tax. For example, Amazon.com started charging sales tax to New York residents on June 1.
Don’t’ lose hope yet fellow New York shoppers, because this isn't over. Amazon has in the last few days called the law "unconstitutional" and is taking its case to the courts. Stay tuned!
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