Thursday, January 22, 2009
Amazon & Overstock vs NY State
The first round of fighting in this case goes against
Amazon and Overstock. Not a good sign for e-commerce. But I believe it goes beyond that to direct mail also. If this case is lost and .coms are forced to collect sales tax not only from NY State but all the other 44 states that have sales tax, can direct mailers be far behind?
The financial burden that will be placed on the marketer will be huge. It will certainly cause them to reevaluate their business strategies. E-commerce is a young and vibrant segment of our industry. Yes it's struggling like the rest of us but this decision has more far reaching effects.
Every state is strapped for money and they will put pressure where ever they can to create a tax revenue stream to help bridge their own fiscal shortfalls. We have been able to ward off the collection of sales tax from companies without a physical presence in the state, but if this case is lost the flood gate may be opened wide.
Labels: .com, legislation, tax
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