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NY Brings Back Lawsuit Over Amazon Sales Taxes

- By - Source : Tom's Guide US

In 1992, a Supreme Court ruling stated that online retailers can't be forced to collect sales taxes on out-of-state shipments unless they have offices in those states.

In recent years, states have been trying to find loop holes in that decision in efforts to gain funds from successful online retailers such as Amazon.com and Overstock.com

Earlier this year, Cnet reported that 16 states were enforcing or thinking about enforcing sales taxes for online retailers. The NY Court of Appeals decision on Thursday, November 4th, is a victory for online retailers that could possibly settle the debate over internet taxes.

In the past decade, states have tried to justify their tax collecting laws by claiming that online retailers such as Amazon and Overstock unreasonably deprive the states of funds and make it unfair for competing local retailers that must collect taxes.

Both online shoppers who pay sales taxes and those who don't will be anxiously awaiting the decisions to come that may decide once in for all what role taxes should play in online shopping.

What do you guys think about these laws? Let us know in the comments below.

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Ragnar-Kon 11/06/2010 10:37 AM
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Well, being an online shopper myself, I LOVE not having to pay taxes.

But at the same time, States need to get their money from somewhere. So online websites probably should charge sales tax... even though I don't like it.

Should be interesting to see how this turns out though...

barmaley 11/06/2010 11:38 AM
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I don't know about other states, but here in Virginia you are supposed to pay state sales taxes on purchases made online if the total spendings for that tax year were $50 or more. It is the responsibility of the buyer not the seller to report your purchases during the year and submit appropriate funds along with the state income tax forms. So, if state isn't getting their money it's not Amazon's fault (again, here in Virginia).

Trashit 11/06/2010 12:01 PM
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Feel free to correct me but it does sound like double dipping to me. Ok so online shopping traders dont have to charge their customers GST however that doesn't mean customers get away that easily, there's still the matter of shipping fees. Again sometimes the shipping free is waved if you spend above a certain amount or its bulk billed but eventually that parcel goes through a shipping/delivery company and they very much do pay tax. Whether it be from the employees salary that delivers your parcel to your door step or from the company itself or even the tax from the fuel needed to drive all those delivery trucks. Sooner or later some of your online spent money makes a pass through the tax mans office.

Anonymous 11/06/2010 12:47 PM
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Aren't we taxed enough? The men who wrote the constitution meant for us to avoid being overtaxed. Federal and state tax laws are already taxing everything we touch. Next they are going to tax the air we breathe. I do not support states taxing us more than they already are. Online shopping was finally a chance for us to get a break from heavy handed taxing. If the states spent the money they already collect wisely, they would not have to constantly search for new ways to tax us. Remember that's what started the revolt against the Britain at the start of the revolutionary war. Unfair taxes!

jmu03182 11/06/2010 12:52 PM
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you yanks do have a stange system. online purchases aren't from businesses in some mystical wonderland exempt from taxes. its just another method of ordering. do you pay tax when phone somewhere and order something? of course. the internet is just a different way of ordering a product and you should pay ur taxes on it. no wonder u have so much debt lol

Camikazi 11/06/2010 1:31 PM
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jmu03182 :
you yanks do have a stange system. online purchases aren't from businesses in some mystical wonderland exempt from taxes. its just another method of ordering. do you pay tax when phone somewhere and order something? of course. the internet is just a different way of ordering a product and you should pay ur taxes on it. no wonder u have so much debt lol


Yea that's the reason for debt, it can't the MASSIVE overspending by the government right? They increase taxes just to cover their own stupidity on what they overpay on.

Anonymous 11/06/2010 2:24 PM
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I love not paying taxes but the states are really getting short changed. going to b&m also supports jobs in your communty. there should be a small tax or tax everythng over certain amount say $100.

Anonymous 11/06/2010 2:42 PM
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We have the same thing going on up here in Canada. Ordering stuff from a different province we have to pay the federal tax but not our provincial one unless the company has offices / stores / establishments in our province.

I don't think it's unfair to local businesses because I sometimes prefer driving 30 minutes and buying what I want right away than wait 2-5 days to get delivered for pretty much the same amount since, when using online retailers you're of course saving taxes, but you're paying delivery / shipping, which, in another way, creates income for the province by creating jobs for local people which creates local income by the means of more taxes!

njalterio 11/06/2010 3:42 PM
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jmu03182 :
you yanks do have a stange system. online purchases aren't from businesses in some mystical wonderland exempt from taxes. its just another method of ordering. do you pay tax when phone somewhere and order something? of course. the internet is just a different way of ordering a product and you should pay ur taxes on it. no wonder u have so much debt lol



You would benefit from doing a little research before posting baseless, uninformed opinions:
http://en.wikipedia.org/wiki/Point_of_purchase
http://en.wikipedia.org/wiki/Consumption_tax

What country do you live in that has no debt?

MeanSquare 11/06/2010 4:21 PM
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The general concept behind taking sales tax is that the business is using the public infrastructure and should be helping to pay for it. (That's why online businesses with offices in a state are required to collect it.) If there is only online presence in the state then collecting sales tax can't be justified by anything more than "we want it." These online businesses are already paying for the only infrastructure they do use (roads, etc.) by paying the companies they use to deliver the goods.

oxxfatelostxxo 11/06/2010 4:31 PM
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Idk about you ppl, but the 31% that they take out of my paycheck i feel is more than enough from me...

wackyphill 11/06/2010 4:44 PM
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MeanSquare is exactly right. Online businesses out of state don't use public infrastructure and have obliogation to pay taxes on things they dont use.

f-14 11/06/2010 4:56 PM
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jmu03182 :
you yanks do have a stange system. online purchases aren't from businesses in some mystical wonderland exempt from taxes. its just another method of ordering. do you pay tax when phone somewhere and order something? of course. the internet is just a different way of ordering a product and you should pay ur taxes on it. no wonder u have so much debt lol



you brits are just as in debt, and you tax for earning, having, and spending money. stop finding new ways to tax people your giving our government too many ideas on what they think they are entitled to, hahaha!

there's already double dipping going on, your taxed for making money and taxed for spending it. that's FDR's fault for associating with Churchill too much i guess, as there was no tax on citizens for earning money before him.
and the states arguements are negated becuase they get to tax the delivery driver on his wages, the company he works for on their earnings, and the taxes on equipment and fuel used to make the deliveries, so they actually make out better, right now it's a democratically elected america and democrats have already spent everything and are just looking for more ways to steal money to spend on their socialism programs. that's the way it's been since FDR every time the democrats get control. republicans appear to have turned the same way since Reagan.

it used to be the goverment made it's money off tarriffs and business taxes. in alot of states online goods are only taxed if it's going to a buyer of the same state as the seller.
i would not be opposed to a federal sales tax on all goods sold so long as they do away with the income tax, or just keep the income tax put everybody at 10-15% and do away with sales taxes.

mtyermom 11/06/2010 6:26 PM
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The idea of 'no tax for out of state purchase' is not limited to online. If you walk into a store to purchase an item and have the store ship it to your out of state address, guess what, you don't pay tax on the purchase.

bhaberle 11/06/2010 6:59 PM
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Damn you NY. Leave us all alone.

toxxel 11/06/2010 7:54 PM
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I tent to buy items online over locally because of tax if I can wait for the item to be shipped, doesn't help that you can usually get free shipping as well where the savings it too much to pass up.

geoffs 11/06/2010 8:11 PM
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jmu03182 :
you yanks do have a stange system. online purchases aren't from businesses in some mystical wonderland exempt from taxes. its just another method of ordering. do you pay tax when phone somewhere and order something? of course. the internet is just a different way of ordering a product and you should pay ur taxes on it. no wonder u have so much debt lol



NY will lose if they try again. This is a long established interstate commerce issue. Most/all the states have a "use tax" that the purchaser is required to report and pay in these circumstances, NY should focus their efforts there, or in getting the law changed.

In practice, states don't spend much trying to enforce or collect the use tax from individuals, it's just not cost effective. However, if you make a large purchase from an out of state company, or you're a business who purchases items that are subject to a use tax, most/all states are actively enforcing it with audits, etc.

NY is completely misdirecting their efforts in this matter, and wasting their taxpayer's money as well as Amazon's money.

mayne92 11/06/2010 8:39 PM
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bhaberle :
Damn you NY. Leave us all alone.


If the states could...they would tax the air that we breathe for each breathe or the breathe that you would think about taking while your holding your breathe so not to be taxed... /rant&sarcasm

beayn 11/06/2010 9:17 PM
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Canada's tax changes mean HST is charged on all online purchases regardless of what province the online store is located in and where the buyer is. It really hits the pocket book along with natural gas, electicity, gasoline, groceries and general recession price hikes...

Getting a little off topic here but just pointing out that in Canada it no longer matters. All online sales have provincial taxes on them now. It sucks.

Comrade58 11/06/2010 11:29 PM
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The public is a fickle beast. We demand lots of public services..., and yet we don't want to pay for them. To the gentleman who says that the 31% they take out of his paycheck is enough, very little of that goes to your state.
We're basically picking up the tab for policing the entire world, but it's not terribly inappropriate since we use so much of the world's resources compared to our share of the population. If you don't want to pay local taxes, the next time you're house catches fire, go on-line and look for instructions on how to put it out. No local taxes, no local police or fire services!

Khimera2000 11/07/2010 12:42 PM
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"out-of-state shipments unless they have offices in those states"

Thats all i need. if there are no offices in your state, and no wearhouses... then your not supporting there infustructure why would they have to pay tax? they chose there locations for there respective tax profiles, and they pay tax in the state they are doing buisness, I say apply tax to shipping a small tax of about 25 cence if they want to gain some revanue. theres garanteed to be a UPS office in every state.

flachet 11/07/2010 1:37 AM
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I pay enough in taxes, the states can piss off.

ordcestus 11/07/2010 2:39 AM
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comrade58 :
The public is a fickle beast. We demand lots of public services..., and yet we don't want to pay for them. To the gentleman who says that the 31% they take out of his paycheck is enough, very little of that goes to your state. We're basically picking up the tab for policing the entire world, but it's not terribly inappropriate since we use so much of the world's resources compared to our share of the population. If you don't want to pay local taxes, the next time you're house catches fire, go on-line and look for instructions on how to put it out. No local taxes, no local police or fire services!


No one I know minds paying some taxes for public services. The issue is when a government is wasteful or comes up with all sorts of "extras" in order to have more power.

JD13 11/07/2010 4:46 AM
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You are also paying into your national health care system from that federal tax.......

Kileak :
We have the same thing going on up here in Canada. Ordering stuff from a different province we have to pay the federal tax but not our provincial one unless the company has offices / stores / establishments in our province.I don't think it's unfair to local businesses because I sometimes prefer driving 30 minutes and buying what I want right away than wait 2-5 days to get delivered for pretty much the same amount since, when using online retailers you're of course saving taxes, but you're paying delivery / shipping, which, in another way, creates income for the province by creating jobs for local people which creates local income by the means of more taxes!


beayn 11/07/2010 5:42 AM
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JD13 :
You are also paying into your national health care system from that federal tax.......



Which just got an enormous boost from the tax increase... oh wait.. no it didn't.

Bluescreendeath 11/07/2010 5:17 PM
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NO MOAR TAXES! RAWRARAWRAR!!!

jbc63 11/07/2010 7:16 PM
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Slick Willie aka Bill Clinton , encouraged a lot of American companies & jobs to China, (land of child labor & sweat shops) and all of those American companies get a tax BREAK!!!!

Dirtman73 11/07/2010 9:25 PM
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jbc63 :
Slick Willie aka Bill Clinton , encouraged a lot of American companies & jobs to China, (land of child labor & sweat shops) and all of those American companies get a tax BREAK!!!!



And every president since Clinton has done absolutely nothing to discourage this practice. What's your point?

fyend 11/07/2010 10:12 PM
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Yet another reason why NY sucks.

techguy378 11/08/2010 6:37 AM
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Everyone should be forced to pay taxes. Lots and lots of taxes. Most states are not getting nearly enough money.

Anonymous 11/08/2010 8:21 AM
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I dont think the State / Province should benefit from sales @ all. The company that is selling already pays TAx's as do its emploies and the actual buyer.. If the State isnt getting enough $, then the people @ the top need to take a pay cut and learn to work with their state budgets better..

Regards,

South Africa guy