Internet Retailers will Need to Collect N.Y. Sales Tax

ALBANY, N.Y. -- A new state law requires out-of-state Internet retailers such as Amazon.com to begin collecting sales tax on purchases made in New York state, Newsday reported Thursday.

State budget officials estimate the law, passed as part of the state budget earlier this month, will bring in $50 million this year and $73 million next year from online sales. That will help balance the budget and offset declines in the personal income tax, officials said, according to the paper.

The state has sent notices to the 500 largest e-tailers in the state, saying they have to register and begin collecting sales taxes by June 1. Companies must comply if they do $10,000 worth of business in the state and have agents within the state acting on their behalf. If they don't comply, the state can audit and assess them for past liabilities, the paper reported.

Although it's a large site, eBay is a marketplace and therefore would not be required to collect sales taxes, officials said. However, if retailers on eBay meet the criteria of $10,000 with agents in New York, they would have to collect taxes, the paper reported.

Previously, if a company did not have a physical presence in the state, it did not have to collect the tax. However, the state now is saying that if one person in New York is serving as an online agent, the company must collect the tax, the paper reported.

-- NYSSCPA.org News Staff

Posted on 4/24/08