There are sixty million reasons why more states will pass affiliate tax laws – Sixty Two Million Dollars of increased sales tax revenue for New York State. Reading through the fiscal analysis testimony provided for several of the pending legislation (including Minnesota, Hawaii and Connecticut) is very enlightening. Since the NY Internet Sales Tax went into effect on June 1 of 2008, NY has collected $46 Million from 30 or so newly registered out of state merchants; not bad for nine months of sales. When NY first announced the law last May, they anticipated around $50 million in increased revenue. With a couple of weeks left still add to their final sales tax figure, i t is clear that the estimates made last year were very good.
The expected NY Internet sales tax revenue for the year 2009-2010 is expected to be 62-68 Million Dollars. This is not total sales tax revenue, but the sales tax that is attributed to the Internet Sales Tax law. There are about 30 newly registered merchants and I am sure more will sign on since the law has not been repealed.
Look at the figures reported in the Fiscal Report for Connecticut SB 806:
This estimate is largely based on New York’s experience since modifying their law. Thirty companies have registered with New York to collect sales taxes and are expected to remit $62 million in state and local taxes in FY 10.
The fact that NY collected over $46 Million from June 1 2008 to March and estimates $60-62 Million in the upcoming fiscal year is a powerful argument for other states to pass similar legislation.
It is an even stronger argument for a Streamlined Sales Tax, simplifying sales tax collection for everyone.