Here is an update on my previous posting of the battle over collecting sales taxes on internet purchases. According to the Technology - New York Times Technology Blog (Let the Tax Collection Begin):
Last Sunday, many but not all online retailers started to collect sales tax on goods shipped into New York. Most significantly, Amazon.com, the largest online store, was one of them.
Overstock.com, however was not one of them. Rather, Overstock sopped doing business with affiliates in New York and has now filed a new lawsuit for an immediate injunction. But, this is a risky strategy. Companies who registered with the New York Tax Department and start collecting the sales tax by June 1 are not liable for past taxes. By not registering, Overstock may be setting itself up for a big tax liability on past sales.
While I've often said that not collecting sales tax on Internet purchases is a tax subsidy for e-commerce, I have to disagree with the retroactive part of this law. You set a date and you apply the rules from then on. If Overstock wants to get out of the New York market as of June 1 because they are not longer getting that tax subsidy, that is fine. But they shouldn't be punished for having benefited from that tax subsidy in the past.
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