Wednesday, April 16, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Supreme Court won’t stop NY’s Internet taxation

By
December 03, 2013 | Leave Comment

WASHINGTON — On perhaps the busiest online shopping day of the year, the Supreme Court refused to wade into a dispute over state sales taxes for purchases on websites like Amazon.com, an outcome likely to prompt more states to attempt to collect taxes on Internet sales.

Monday’s court action means “it might be the last Cyber Monday without sales tax,” said Joseph Henchman of the Washington -based Tax Foundation.

It’s all part of a furious battle — also including legislation in Congress — among Internet sellers, millions of buyers, aggrieved brick-and-mortar stores and states hungry for billions of dollars in extra tax revenue.

The high court without comment turned away appeals from Amazon.com LLC and Overstock.com Inc. in their fight against a New York court decision forcing them to remit sales tax the same way in-state businesses do. This could hurt online shopping in that state, since one of the attractions of Internet purchasing is the lack of a state sales tax, which makes some items a little cheaper than they would be inside a store on the corner.

And the effect could be felt far beyond New York if it encourages other states to act. The National Council of State Legislatures estimates that states lost an estimated $23.3 billion in 2012 as a result of being unable to collect sales tax on online and catalog purchases.

The court’s refusal “allows states that have passed laws like New York’s to continue doing what they’ve been doing,” said Neal Osten, director of the Council’s Washington office.

This decision came down on Cyber Monday, expected to be the busiest day of the year for online shopping. Huge numbers of people head online on the first working day after the long Thanksgiving weekend in search of Internet deals. Overall, Internet shopping has become more and more popular, with the National Retail Federation predicting that more than 131 million people would shop online on Monday, up about 2 percent from last year.

Web retailers generally have not had to charge sales taxes in states where they lack a store or some other physical presence. But New York and other states say that a retailer has a physical presence when it uses affiliates — people and businesses that refer customers to the retailer’s website and collect a commission on sales. These affiliates range from one-person blogs promoting the latest gadgets to companies that run coupon and deal sites.

Amazon and Overstock both use affiliate programs. Amazon has been collecting sales tax in New York, even as it fights the state over a 2008 law that was the first to consider local affiliates enough of an in-state presence to require sales tax collection. Overstock ended its affiliate program in New York in 2008 after the law passed and has ended its affiliate programs in other states that have tried to force it to collect sales taxes.

Without the affiliate programs, companies still can sell in those states but just won’t partner with local people and businesses that refer customers to their sites.

Both companies collect sales taxes in some states. For example, Overstock.com collects taxes in Utah, where it is based. Amazon says it collects sales tax in 16 states.

“Today’s Supreme Court decision validates New York’s efforts to treat both online and brick-and-mortar retailers equally and fairly, by requiring all retailers with a presence in our state to collect sales taxes,” said New York Attorney General Eric T. Schneiderman.

But each state has its own rules. While Monday’s result settles the issue for New York, legislatures and courts in other states have come to different conclusions — meaning that some Americans will still get state tax-free Internet purchases from certain websites, while others won’t simply because of where they live.

In October, for example, the Illinois Supreme Court threw out a law that would tax certain Internet sales, saying the “Amazon tax” violated federal rules against discriminatory taxes on digital transactions. State officials are considering whether to appeal their case to the U.S. Supreme Court.

And the big Internet sellers are hardly giving ground after Monday’s Supreme Court result. Both Amazon and Overstock said they plan to press their case in Congress in hopes of getting a federal decision on Internet sales taxes that would apply to every state uniformly.

Amazon supports the Marketplace Fairness Act, which passed the Senate in May. That law would require states to simplify their sales tax laws in exchange for being able to tax Internet sales from companies with more than $1 million in sales annually.

The bill is now in the House, where there is no guarantee it will make it to a vote. Supporters say it is needed out of fairness to stores operating at a price disadvantage to online operations that don’t charge sales taxes, while some lawmakers oppose the change as the imposition of a new tax.

Will more states enact laws after the Supreme Court result?

“States might take courage from this non-decision, but they shouldn’t,” said Jonathan Johnson, executive vice chairman of Overstock.com. He pointed out that the company pulled its New York affiliate operations in 2008 after that state passed its law and that other companies fled Illinois after that state passed a similar law.

Internet companies will simply operate in states that have laws advantageous to their businesses, Johnson said. “Unless all the states choose to do this, I think there will be a strong affiliate market” somewhere, he said.

Henchman, who is vice president, state projects for the Tax Foundation, a national tax research association, noted that the sales tax issue may become moot for Amazon if it goes through with its drone program for same day delivery. Amazon.com has said it’s working on a self-guided drone with a range of 10 miles that could deliver packages to customers in areas remotely.

“In order to do this, they’re going to have to build a lot more warehouses,” Henchman said, giving them in-state presences in those markets and requiring them to collect state sales taxes.

The Associated Press

The Associated Press

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

 
Supervisor candidates file conflict-of-interest forms

By Barry Eberling | From Page: A1

 
Vacaville set to usher in new chapter for Police Department

By Susan Winlow | From Page: A1 | Gallery

 
Solano Jews gather for start of Passover

By Amy Maginnis-Honey | From Page: A3 | Gallery

Suisun council debates train depot renovation

By Ian Thompson | From Page: A3

 
 
Trial begins for teacher accused of abusing children

By Jess Sullivan | From Page: A3

Suisun police ID shooting victim

By Ian Thompson | From Page: A3

 
County discusses consolidated dispatch

By Barry Eberling | From Page: A4

Miner Slough Bridge to see repairs

By Barry Eberling | From Page: A4

 
Easter hunt set for Mare Island

By Barry Eberling | From Page: A5

 
‘Heaven is for Real’ opens Wednesday

By Amy Maginnis-Honey | From Page: B5

 
 
Fiesta Days pageant organizers seek contestants

By Amy Maginnis-Honey | From Page: A5

Coakley joins Solano fair board

By Barry Eberling | From Page: A6

 
Crews make quick work of vehicle fire

By Glen Faison | From Page: A6, 6 Comments | Gallery

 
Paper Clover Campaign supports Solano County 4-H

By Amy Maginnis-Honey | From Page: A6

 
Hundreds flock to Krispy Kreme as it opens doors

By Susan Winlow | From Page: B9 | Gallery

 
County to honor Solano educators

By Barry Eberling | From Page: A14

.

US / World

Officials: Huge San Francisco blaze was accidental

By The Associated Press | From Page: A10

 
‘Shrimp Boy’ pleads not guilty in corruption case

By The Associated Press | From Page: A10

Solemn tributes mark Boston Marathon bombing

By The Associated Press | From Page: A10 | Gallery

 
Immigration activists urge Obama to act boldly

By The Associated Press | From Page: A11

First women move into Army platoon artillery jobs

By The Associated Press | From Page: A14

 
Final deadline arrives for health exchange sign-up

By The Associated Press | From Page: A14

New LA newspaper embraces print in digital world

By The Associated Press | From Page: A14

 
Congress is giving states the transportation blues

By The Associated Press | From Page: A14

Police: Suspects in killings wore GPS devices

By The Associated Press | From Page: A14, 1 Comment

 
DNA alternative to Pap smear sparks medical debate

By The Associated Press | From Page: A14

Robot sub returns to water after 1st try cut short

By The Associated Press | From Page: A14

 
Supremacist faces murder charges in Kansas deaths

By The Associated Press | From Page: A14

Ukraine: Military secures airport from attack

By The Associated Press | From Page: A14

 
Democrats have outside money advantage – for now

By The Associated Press | From Page: A14

Hamas praises deadly West Bank shooting

By The Associated Press | From Page: A15

 
2 dead after ferry sinks off SKorean coast

By The Associated Press | From Page: A15

.

Opinion

Oh, for the days of Dr. Welby

By Dan K. Thomasson | From Page: A13, 11 Comments

 
Poor Judgement in Flight 370 column

By Letter to the Editor | From Page: A13

 
Senseless babble that hurts

By Letter to the Editor | From Page: A13

Expand Red Top Road

By Letter to the Editor | From Page: A13

 
Editorial cartoons for April 16, 2014

By Daily Republic Syndicated Content | From Page: A13

State Senate must do more to restore trust

By Thomas Elias | From Page: A13

 
.

Living

Today in History for April 16, 2014

By The Associated Press | From Page: A2

 
Community Calendar: April 16, 2014

By Susan Hiland | From Page: A2

What love gives you

By Barton Goldsmith | From Page: A2

 
Saving carrots from their usual sugary Easter fate

By Sara Moulton | From Page: B6

Sweet pairings for grown-up Easter treats

By The Associated Press | From Page: B6

 
A matzo ball soup fit for a weeknight dinner

By The Associated Press | From Page: B6

My husband still pays his 45-year-old unemployed son’s bills

By Kathy Mitchell and Marcy Sugar | From Page: B7

 
Horoscopes for April 16, 2014

By Holiday Mathis | From Page: B7

.

Entertainment

Boston Globe wins Pulitzer for bombing coverage

By The Associated Press | From Page: B5

 
Lindsay Lohan’s mom pleads guilty to DWI in NY

By The Associated Press | From Page: B5

Strahan’s ‘GMA’ side job confirmed with his visit

By The Associated Press | From Page: B5

 
TVGrid

By Daily Republic Syndicated Content | From Page: A11

.

Sports

Cal hires Tennessee’s Cuonzo Martin as coach

By The Associated Press | From Page: B1

 
Warriors trying to move on without Andrew Bogut

By The Associated Press | From Page: B1

Sharks’ Torres uncertain for playoff opener

By The Associated Press | From Page: B1

 
Indians shut out Mustangs

By Marcus Lomtong | From Page: B1 | Gallery

Ex-Minnesota State, Mankato coach returning to job

By The Associated Press | From Page: B2

 
Panthers jump Sabres to win NHL draft lottery

By The Associated Press | From Page: B2

More former players sue NHL regarding concussions

By The Associated Press | From Page: B2

 
49ers sign WR Brandon Lloyd to 1-year deal

By The Associated Press | From Page: B2

MLB marks 67th anniversary of Jackie Robinson’s debut

By The Associated Press | From Page: B2

 
.

Business

Twitter buys data analytics partner Gnip

By The Associated Press | From Page: A14

 
Yellen signals more aggressive stance toward banks

By The Associated Press | From Page: A14

.

Obituaries

Carolyn McClelland

By Nancy Green | From Page: A4

 
Evonne Medina

By Nancy Green | From Page: A4

.

Comics

For Better or Worse

By Daily Republic Syndicated Content | From Page: B6

 
Beetle Bailey

By Daily Republic Syndicated Content | From Page: B6

Zits

By Daily Republic Syndicated Content | From Page: B6

 
Rose is Rose

By Daily Republic Syndicated Content | From Page: B6

Sally Forth

By Daily Republic Syndicated Content | From Page: B6

 
B.C.

By Daily Republic Syndicated Content | From Page: B6

Baldo

By Daily Republic Syndicated Content | From Page: B6

 
Baby Blues

By Daily Republic Syndicated Content | From Page: B6

Dilbert

By Daily Republic Syndicated Content | From Page: B6

 
Frank and Ernest

By Daily Republic Syndicated Content | From Page: B6

Get Fuzzy

By Daily Republic Syndicated Content | From Page: B6

 
Blondie

By Daily Republic Syndicated Content | From Page: B6

Garfield

By Daily Republic Syndicated Content | From Page: B6

 
Peanuts

By Daily Republic Syndicated Content | From Page: B6

Pickles

By Daily Republic Syndicated Content | From Page: B6

 
Wizard of Id

By Daily Republic Syndicated Content | From Page: B6

Sudoku

By Daily Republic Syndicated Content | From Page: B7

 
Bridge

By Daily Republic Syndicated Content | From Page: B7

Cryptoquote

By Daily Republic Syndicated Content | From Page: B7

 
Word Sleuth

By Daily Republic Syndicated Content | From Page: B7

Crossword

By Daily Republic Syndicated Content | From Page: B7