New York Cuomo’s proposal to require that Sales Tax be collected by Online Retailers is an acknowledgement of a new kind of Marketplace and a shift in how money is changing hands.

One of the Major sources of Revenue for State and Local Governments is the Sales Tax. The problem lately is that more and more sales are done without a Tax being collected, as consumers increasingly use the internet to buy stuff.

This is particularly so if the E-Retailer isn’t located in the State in which the Sale takes place.

This predates the Internet, when Mail-Order shipments across State lines were tax free in certain conditions. Back then, the impact on both Local Retailers and on Government coffers was relatively small. But as Internet sales grow, however, the old policy grow obsolete.

The Quill case, which I was part of, said that you had to collect Sales Tax if you had the following conditions:

- You maintained a physical operation: store, warehouse, sales office.

- You hired Local Sales Representatives in a State.

The reasoning, your Company was using the Services of the State.

But as the Internet grew, Websites were sending orders to larger Companies, like Amazon, and receiving a Commission. The original Quill did not cover this new version of a Sales Representative.

New York in 2008 began taxing big online sellers like Amazon, but not Retailers that use platforms like Amazon or eBay.

Gov. Andrew Cuomo proposes to require that sales Tax be collected by such online “Marketplaces” that have more than $100 million in Annual Sales.

It is time to revisit Quill, and have it updates by the Supreme Court. Then Congress will have a Legal Foundation to create a new Online Sales Tax process.











NYC Wins When Everyone Can Vote! Michael H. Drucker