Sales Tax Initiative

While just a few years ago media reports usually emphasized the uniqueness of online – and very often sales-tax-free – shopping, this year’s articles have a decidedly different tenor: A much greater percentage are pointing out the incongruities and inequities inherent in the failure to collect mandated sales tax.

The New York State Department of Taxation is hailing an appeals court’s recent decision that the state’s affiliate nexus law is, in fact, constitutional as a “major victory.”

The New York State appellate court has dismissed Amazon.com and Overstock’s claims substantively challenging the constitutionality of New York State’s sales tax fairness law. The decision represents a significant victory for proponents of sales tax equity.

Following a recent federal court decision and steps taken by the Texas Department of Revenue to collect sales tax that it contends is due from Amazon.com, a number of editorials have been published decrying Amazon’s refusal to collect sales tax.

In mid-October, three booksellers and a representative from ABA met in Concord, New Hampshire, with the legislative director for Congressman Paul Hodes (D-NH) to express their support for the federal solution to online sales tax fairness, the Main Street Fairness Act.

The U.S. District Court for the Western District of Washington ruled this week that Amazon.com would not have to comply with the North Carolina Department of Revenue’s request for data revealing the identities of North Carolina customers and “detailed records of their purchases, including the expressive content.”

The State of Texas has issued an assessment charging that Amazon.com owes the state some $269 million in uncollected sales tax, including interest and penalties, for the period from December 2005 to December 2009. Amazon.com reported the assessment in its September 30 quarterly filing with the SEC.

As California lawmakers and Governor Schwarzenegger haggled over a final state budget, one apparent casualty of the negotiation process was sales tax fairness. Despite the need to close a $19.1 billion budget gap, state Republicans insisted that the sales tax provision be removed, arguing that they would only agree on a "no-new-taxes budget."

On Wednesday, September 29, three Illinois booksellers testified on behalf of sales tax fairness legislation.

As budget talks heated up in California this week, ABA, NCIBA, and SCIBA urged their members in the state to call Gov. Arnold Schwarzenegger’s office to express support for sales tax fairness.