What has become known as the Amazon Tax has been put in place by state of New York, in an effort to circumvent the restrictions on internet sales. In their wisdom the legislature of New York state, has decided that if a private person has a banner ad on their website, let us use a ad for Amazon as an example, then the retailer must collect and pay taxes to the state.

In an overstock.com article the writer states:

So far the primary result has been companies pulling the plug on affiliate programs for NY residents causing those individuals a loss in revenue but solving the tax problem for the site operators. NY gets no tax and NY citizens lose income. No one wins, everyone looses.

I have proposed that these online retailers, rather than punishing their affiliates, halt sales to residents of New York. This will enlist those people to create an outcry in their legislature as they see their ability to buy online dwindle as a result of this law.

The larger implication of this is that other states will be watching. It is about NY now, but if they get by with this other states will follow suit, eventually causing a decline in ecommerce and more loss to individual affiliates trying to make a living online.

Do you believe that this type of legislation is fair or unfair to consumers and businesses alike? What do you think?

Comments welcome.


PS There is also a link to join the tax protest against the Amazon Tax.