Overstock Cuts Off NY Affiliates Over NY's Amazon Sales Tax Law

from the nice-work,-New-York dept

Last month we wrote about how New York was changing a law to try to force Amazon to collect and pay sales tax in New York by defining any affiliate in the state as being an Amazon point of presence. This is a clear perversion of the intention of the law that only requires collecting sales tax if the company has a physical presence in the state. While Amazon is now fighting this law in court, others are taking more drastic measures. E-commerce site Overstock.com has declared that it will no longer allow New York affiliates in order to avoid having the state consider it to have a "physical presence" there. This would be an unintended consequence of such a law. In an effort to get e-commerce providers to cough up more in taxes, not only will Overstock not be paying those taxes, it just made life a lot more difficult for thousands of Overstock affiliates in New York.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Anonymous Coward, May 15th, 2008 @ 12:02pm

    This sort of action pleases me greatly.

    States think they can unfairly bilk people on sales taxes like this and that it will reward them in the end. The truth is that people will simply stop buying things and they'll dick the economy over in the long run.

    Right now, I buy everything I can over the internet. I use Amazon's premier service (I buy a LOT of stuff from them - probably $15k per year just from Amazon alone).

    If I had to start paying taxes on everything I bought? I would simply stop buying things. Period. I would wait until I visited my home town of Portland Oregon and buy everything tax free and in person.

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    Haywood, May 15th, 2008 @ 12:19pm

    Re: +infinity

    Now they can lose the property tax those affiliates would have payed, along with the jobs they would provide. The people who would have worked those jobs would have paid taxes as well. Way to go NY lose lose situation. Grabbing defeat out of the jaws of victory.

     

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  3.  
    identicon
    JB, May 15th, 2008 @ 12:20pm

    Money Swirls Around the Economy

    New York will lose income taxes due to reduced income for these affiliates.

    Taken to the extreme, these affiliates spend their income in the state, and now other NY businesses will have reduced revenue, so those businesses and their employees will also pay less income tax to the state.

    End result: the state will STILL collect no sales tax on Overstock purchases, but they also cut their income tax receipts as well.

     

    reply to this | link to this | view in thread ]

  4.  
    identicon
    Anonymous Coward, May 15th, 2008 @ 12:30pm

    New York is the new Florida

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    JL, May 15th, 2008 @ 12:45pm

    Re: New Florida?

    I thought Florida is where New Yorkers (City) went to die?

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    Gary, May 15th, 2008 @ 12:45pm

    I spent the first 30 years of my life in New York.

    I moved out of New York in large part due to the dysfunctional nature of the state government.

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    Bah who needs one, May 15th, 2008 @ 12:50pm

    Those ex-affiliates will even be paying less NY sales tax, having less money and therefore presumably buying less goods within the state.

     

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  8.  
    identicon
    Katrenavantassle, May 15th, 2008 @ 1:03pm

    Overstock vs New York

    Is the dysfunctional state government why all the New Yorker's came to Charleston SC???

     

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  9.  
    identicon
    Anonymous Coward, May 15th, 2008 @ 1:11pm

    Same here

    In Santa Cruz they over tax businesses so all the businesses left. Now Santa Cruz is broke and everyone that lives here has to drive to the Bay Area to work. Not very smart.

     

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  10.  
    identicon
    Anonymous Coward, May 15th, 2008 @ 1:22pm

    is "payed/paid" the new "loose/lose"?

    Outside a couple decent online camera shops, NY seems to be filled with a lot of online grey market scammers and bait and switchers.

    Loosing (see what I did there?) NY affiliates might actually be a positive thing.

     

    reply to this | link to this | view in thread ]

  11.  
    identicon
    TSO, May 15th, 2008 @ 1:47pm

    Re:

    > If I had to start paying taxes on everything I bought? I would simply stop buying things.

    Bad news for you: you have to. http://en.wikipedia.org/wiki/Use_tax

     

    reply to this | link to this | view in thread ]

  12.  
    identicon
    Anonymous Coward, May 15th, 2008 @ 2:01pm

    What about every online store that originates in New York, like B&H Photo? If I, being in the dry heat of Arizona purchase online directly from B&H will I be force to pay the tax? If so I guess I'll find a none New York store to by from!

     

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  13.  
    identicon
    Anonymous Coward, May 15th, 2008 @ 2:47pm

    EXACTLY how youa re supposed to do it

    Good job Overstock. Bravo.

    Now if only people would do that to the music/movie companies represented by the RIAA/MPAA...

     

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  14.  
    identicon
    wasnt me, May 15th, 2008 @ 3:49pm

    good job overstock, maybe amazon should do the same.

     

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  15.  
    identicon
    Josh, May 16th, 2008 @ 8:12am

    Now its Amazon's turn

    I'd like to see Amazon speculate on doing the same thing. Or better yet, speculate on having to stop all deliveries in NY because of that law. You'd get all the customers in NY complaining, plus affiliates, plus other companies like UPS and FedEx that make a bundle shipping the products.

     

    reply to this | link to this | view in thread ]

  16.  
    identicon
    somedude, May 16th, 2008 @ 3:55pm

    i'd pay to see amazon.com announce they were no longer shipping products to new york.

     

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  17.  
    identicon
    Jason Forthofer, May 21st, 2008 @ 9:20am

    Another angle to this law

    Another angle on this law. It's actually the network that pays the affiliate (in most cases). It's the network, not the merchant that sends the W-2. Can this new law only apply to the affiliate networks based in New York, like Linkshare? Essentially, merchantes pay the network, not the affiliate.

     

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  18.  
    identicon
    Bucknutty, Jun 4th, 2008 @ 5:28pm

    God I hate New York. We get creamed on sales taxes, property taxes, income taxes and gasoline taxes. We pay the highest fees for bridges and tunnels and forget about parking a car unless your willing to shell out $50 a day. Now we can't buy online without NY taking a cut. All that tax money to pay a corrupt and dysfunctional state government. It really sucks

     

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  19.  
    identicon
    I hate NY, Jul 3rd, 2008 @ 10:37am

    Re:

    do you mean it's the new nations wang?

     

    reply to this | link to this | view in thread ]

  20.  
    identicon
    Mike Lau, Jul 12th, 2008 @ 10:08am

    Change Address

    Can we change address in our profile and be allowed back in?

    Any help is appreciated.

    Thanks,
    Mike

     

    reply to this | link to this | view in thread ]

  21.  
    identicon
    barry, Jul 22nd, 2008 @ 5:10am

    OVERSTOCK SAYS NY STATE IS BACKING DOWN

    According to their most recent earnings report, they said that NY state will reverse themselves since it will cost them so much to fight it in court. You can read the entire transcript here with the link going directly to the part of interest:

    http://seekingalpha.com/article/85766-overstock-com-inc-q2-2008-earnings-call-transcrip t?page=-1&find=new+york

     

    reply to this | link to this | view in thread ]

  22.  
    identicon
    barry, Jul 27th, 2008 @ 1:04am

    NEW DEVELOPMENT! NY MAY REPEAL THIS TAX LAW!

    There have been some new developments in this on going issue. NY state maybe backing down according to this new Seeking Alpha article:

    http://seekingalpha.com/article/86766-amazon-overstock-gamble-may-pay-off

     

    reply to this | link to this | view in thread ]

  23.  
    identicon
    kidknight7, Aug 2nd, 2010 @ 6:34pm

    Amazon vs. the States

    I heard about this on the news only that it was in a state out west. I think Colorado, Amazon was up in arems about being taxed by a state and suspended the payments to affiliates registered there in order to avoid paying a tax. In the future it will be forthcoming. "New York Tours"

     

    reply to this | link to this | view in thread ]


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