New York Orders Large Web Retailers To Charge Sales Tax

New York Internet shoppers, take note: in five weeks, sales tax-free shopping will end on many Web sites thanks to rewritten state rules that are trying to force Internet retailers to collect. For years, retailers with "brick and mortar" stores in New York, such as Wal-Mart, have charged sales tax on orders placed through their Web sites. Yet Amazon.com and other e-tailers with no physical stores have not charged the tax, much to the delight of Internet bargain hunters, like online shopper April Cantin. "Coming here, you have to pay a lot of tax, when you pay on line, you pay nothing, just shipping and handling and the item," she says.

However, in the midst of a budget crisis, New York is now telling Amazon and certain other large Internet-only vendors they must collect state and local sales tax -- if they allow sales via "click-throughs" from New York-based Web sites. The new rule is set to go into effect on June 1. The state estimates this new Internet tax will bring in $50 million this year and $75 million next year. But the new rulings aren't sitting well with the Internet giants. Amazon, the largest Internet retailer, is objecting to the decision, saying "this is the wrong time to increase taxes on New Yorkers."

View: Full Story at CBS TV NY

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