Retail Council supports Governor Spitzer’s Internet Sales Tax Collection Proposal

ALBANY, NY (01/22/2008)(readMedia)-- The Retail Council of New York State today applauded Governor Spitzer’s Executive Budget proposal for New York State to collect state and local sales and use taxes from certain sales made over the Internet.

Retail Council President and CEO James R. Sherin said: “Governor Spitzer’s proposal is a bold and necessary initiative that will help small retailers in New York State who today struggle to compete with Internet giants. These on-line merchants – none of which are based in New York – operate with an unintended competitive advantage fostered by a confusing sales tax landscape.

“New York must stop sanctioning sales tax avoidance practices and stop giving unfair pricing advantages to out-of-state retailers at the direct expense of the storefront, taxpaying merchants who are the backbone of our Main Street economies across this state.

“The Senate and Assembly have, in recent years, aggressively and appropriately pushed New York State to the table in national discussions about sales tax simplification. But as those national talks have slowed, even stalled, so, too, has the momentum to create the necessary ‘level playing field’ for this state’s Main Street merchants. While a national, uniform approach to Internet sales tax collection is preferable, this singular attempt by New York State is a solid step in the right direction and should be encouraged.

“The Retail Council represents thousands of member stores, from the smallest in the state to the largest. Each one is required to collect and remit the state and local sales tax on nearly every transaction they make. These are the merchants who are seeing more and more of their customers buy on line the same goods that they sell – but from e-retailers that undercut their selling price by at least 8 percent or higher, depending on the combined state and local sales tax rate.

“Let me underscore that Governor Spitzer’s proposal is most definitively not a new tax. It is practical and tactical application and enforcement of existing law.

“When the state’s convoluted sales and use tax laws were initially conceived and then amended over the years, no one imagined the very existence – let alone the breadth and depth – of today’s e-commerce marketplace. But now, hundreds of millions of tax dollars which could be used to help underwrite state and local government and help close the budget deficit are, today, simply ignored and uncollected.

“Do New Yorkers, already suffering the highest state and local tax burden in the nation, want to pay even more in taxes? Of course not. But getting rid of the sales tax altogether in New York is no more a viable solution than is refusing to collect a large and growing percentage of consumer sales tax via the e-commerce arena.

“This plan will require strict regulations and a dedicated effort to enforce, but we think it absolutely essential to the future of brick-and-mortar retail in New York State and a testimony to competitive equity.

“Let merchants compete on service, price, and product, not tax policy. We thank Governor Spitzer for his leadership on this important issue, and look forward to working with our members and the state legislature in the weeks ahead to implement this part of the budget package.”

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