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Sixty Two Million Reasons States Will Pass Affiliate Tax Law

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 There are about 30 newly registered merchants and I am sure more will sign on since the law has not been repealed.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.

{ 3 comments… add one }

  • BC March 30, 2009, 6:48 pm

    wooah! That’s alot of money! No wonder they want to collect the tax. May not be poppular with some people but I am glad they are starting to collect this tax. Then maybe other taxes won’t have to go up more.

  • Mark Welch April 1, 2009, 2:06 am

    Any idea what % of this is from Amazon? I assume more than half, perhaps 80-90%.

    I actually see no way for NY to fairly identify and segregate companies captured by the “Amazon Tax” — and I certainly don’t trust them to do a fair analysis. They may have included companies that started collecting NY tax for other reasons (such as hiring NY employees or adding NY warehouse or retail stores). They may also just make up numbers since individual retailer data is confidential so nobody can check.

  • Melanie April 2, 2009, 6:23 am

    I tend to disagree, NYS has no reason to make up numbers. They are reporting 30 + new out of state merchants as of June 1 last year with the sales tax revenue mentioned above.

    $62-68 is the estimated tax revenue for the fiscal year that began April 1.

    This information has been provided by NYS to other States’ investigators and revenue departments and is used as testimony by states.

    I doubt Amazon accounts for more than 50%. If they do, that is an incredible amount of sales and in my opinion would indicate a nexus beyond a shadow of a doubt.

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