Amazon Balks At NY Tax On Internet Sales

February 13, 2008 9:00 a.m. EST

Albany, NY (AHN) - Online retailer Amazon is labeling as 'radical' a proposal outlined in New York Governor Eliot Spitzer's budget requiring out-of-state ecommerce sites to collect state sales tax.

The proposal would effect any Internet business that has at least one state resident that receives a fee. The law, if approved by the state, would hit any online business with at least $10,000 in New York sales.

Spitzer said New York State loses $47 million from uncollected taxes by Internet retailers.

This is the second time such a sales tax proposal appeared in the state. In November, Spitzer dropped the proposal, saying it wasn't the right time to approach the subject.

In 1992, the U.S. Supreme Court ruled that states could not collect sales tax from Internet retailers that don't maintain a physical location within their boundaries.