Retailers support governor’s ‘marketplace’ sales tax plan

“It’s not a new tax” says Council President

The Retail Council of New York State today urged lawmakers to approve as written a proposal from Governor Andrew Cuomo’s Executive Budget seeking to require “marketplace providers” to collect New York’s state and local sales taxes on merchandise shipped in to the state from out-of-state sellers.

“It is not a new tax or a new fee,” said Retail Council President and CEO Ted Potrikus. “Nor is it a tax on the Internet. It simply applies the state’s existing nexus law to a new and growing Internet sales platform.”

New York adopted the “click-through nexus” law in 2008 to require certain out-of-state or online merchants to collect tax on sales of their own merchandise. That first-in-the-nation law is the template for statutes in nearly two dozen other states and survived court challenges up to and including the New York State Court of Appeals.

“The budget proposal simply would require the largest cyber marketplaces to collect tax on all sales to New York buyers,” Mr. Potrikus said. “The collection obligation would be no different from that currently imposed in New York on consignment shop owners and auction houses which, like the marketplace platform, facilitate sales and control the cash register. They’re best suited to collect tax on sales by the sellers they assist.”

The budget proposal would require online marketplaces with more than $100 million in annual sales to collect and remit tax just as consignment shop owners and auction houses now do. Estimates show that improved enforcement of existing tax laws would result in some $275 million in FY 2018-19.

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