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New York State Considers a Tax on All Internet Sales Following Projected Budget Shortfall

Remember that tax deal that New York promised Amazon to bring the retailer to Long Island? Apparently it involved money that the state didn’t have.

Newsday reports that New York governor Cuomo has proposed expanding sales tax to all internet purchases (it’s not clear whether this will include ebooks and other digital content sales, which are currently exempt).

Gov. Andrew M. Cuomo is proposing to take advantage of a recent U.S. Supreme Court ruling that would allow New York to charge sales tax on all internet sales, potentially adding to the cost of internet purchasing while providing an even playing field for traditional stores.

Cuomo proposes requiring all companies that sell products over the internet to collect state and local sales tax — about 7 percent in much of the state — which he said would result in $250 million in tax revenue to the state per year.

The measure has been sought for years by traditional stores with a physical presence in the state as internet sales grew. A new coalition of chambers of commerce on Long Island, along with Suffolk County Executive Steve Bellone, plans to lobby for the measure in Albany. The state budget is due April 1.

Without it, local businesses say they are at a disadvantage as internet-based sellers can avoid charging sales tax.

“It is counterproductive to principles of fairness, harmful to local economies, bad for Main Street and retail jobs,” said Morris Peters, Cuomo’s budget spokesman.

Don’t you just love what they said about fairness?

I mean, it was only a few months ago that they promised the world’s largest internet retailer a huge tax incentive package if it would open new offices in the state, and now they are saying that they need to be _fair_ to local retailers?

We are truly living in 1984, folks, if a politician can promise a huge tax break to a huge retailer and then talk about making things fair for smaller retailers.

Speaking of which, the Amazon tax break may never come to pass. It needs to be approved by regulators before it goes into effect in 2020, and it’s facing fierce opposition.

The Washington Post said Amazon is reconsidering the plan to expand in NYC: is reconsidering its plan to bring 25,000 jobs to a new campus in New York City following a wave of opposition from local politicians, according to two people familiar with the company’s thinking.

Amazon executives have had internal discussions recently to reassess the situation in New York and explore alternatives, said the two people, who spoke on the condition of anonymity to speak candidly about the company’s perspective.

“The question is whether it’s worth it if the politicians in New York don’t want the project, especially with how people in Virginia and Nashville have been so welcoming,” said one person familiar with the company’s plans.

Hailed as an economic triumph when it was announced by Gov. Andrew M. Cuomo (D) and Mayor Bill de Blasio (D), the project in the Long Island City neighborhood of Queens now faces withering criticism from some politicians and advocacy groups appalled at the prospect of giving giant subsidies to the world’s most valuable company, led by its richest man. (Amazon founder and chief executive Jeffrey P. Bezos also owns The Washington Post.)

In the past two weeks, the state Senate nominated an outspoken Amazon critic to a board where he could potentially veto the deal. City Council members for the second time aggressively challenged company executives at a hearing where activists booed and unfurled anti-Amazon banners.

Key officials, including freshman U.S. Rep. Alexandria Ocasio-Cortez (D-N.Y.), whose district borders the proposed Amazon site, have rallied against the project. And opponents went door-to-door to warn people in Queens of looming rent hikes and displacement, much as Seattle experienced during the company’s explosive growth there.

If Amazon loses the tax incentive, many of the promised 25,000 jobs will still end up in NYC simply because it is NYC. Amazon would have opened new offices there anyway because it is a tech, finance, and business hub (this is why many of us hated the tax incentive deals).

The final home of the rest of the jobs will likely depend on which jurisdiction is willing to pay the biggest bribe to the world’s richest online retailer.

And that will be hard to predict.

image by jjbers via Flickr

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Disgusting Dude February 8, 2019 um 2:38 pm

Don’t be so sure the jobs will come anyway.
NY is bleeding upper middle class residents because of the new tax code limiting the local tax deductions.
Billionaires and salaried folk aren’t hurt much by the limits but for a lot of the people in the lower six figure range the limit really hurts. Five-figure pain.
Florida and Texas are seeing a big influx of the people, their spending, and the jobs from NY NJ, and Illininois.
That is where the shortfalls are coming from.
Try this:
Odds are the jobs end up in Alexandria.

New York State Considers a Tax on All Internet Sales Following Projected Budget Shortfall – February 8, 2019 um 2:47 pm

[…] that tax deal that New York promised Amazon to bring the retailer to Long Island?.  Source: […]

Allen F February 8, 2019 um 5:17 pm

NYC bait-n-switch? 😉

Any bets Jeff and company smelled a rat and that’s why there was two 'winners' just in case one turned out to be a false flag?

Nate Hoffelder February 8, 2019 um 6:00 pm

I wouldn’t call the NYC deal a bait and switch; the problem was that the deal was struck before everyone was on board.

Allen F February 10, 2019 um 12:46 pm

And since they noticed 'not everybody was on board' they hedged their bets in case things went sour on them – which seems to have happened …

Mike Cane February 8, 2019 um 6:41 pm

Both state and city have revenue shortfalls. The Mayor’s favorite past-time during the budget is to eviscerate the public library budget. Here we go again …

Darryl February 9, 2019 um 3:35 am

"If Amazon loses the tax incentive, many of the promised 25,000 jobs will still end up in NYC simply because it is NYC."

Simply because it is NYC? I’m trying to think why? I suspect that Amazon doesn’t need NYC. It has plenty of choices.

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