Counties want NY to make large out-of-state companies collect sales tax on Internet purchases

Posted 20 March 2018 at 4:25 pm

Press Release, New York State Association of Counties

Photo by Tom Rivers: Downtown Albion is pictured recently. The Main Street businesses collect sales tax while large out-of-state companies do not for Internet purchases, which puts the local businesses at a competitive disadvantage.

On behalf of its member counties, the state’s retailers and property taxpayers, today the New York State Association of Counties called on state legislators to support the Internet Fairness and Conformity Act in the 2018-19 State Budget.

The Internet Fairness and Conformity Act would require online marketplaces with more than $100 million in annual sales, such as Amazon, eBay and Etsy, to collect sales tax on any sales coming into New York. Currently, the state’s outdated tax collection system does not require out-of-state Internet-based competitors to collect sales taxes.

“Current state sales tax law favors out-of-state businesses over our own Main Street and mall businesses,” said NYSAC President MaryEllen Odell, the Putnam County Executive. “These are businesses that operate in our communities, employ our family members and neighbors, belong to our Rotary Clubs and sponsor youth athletics. If you have a brick and mortar store in New York than you must collect sales taxes whether you are selling in person or online. But the online seller from Nebraska does not have to collect those sales taxes, and they also are not employing our neighbors or sponsoring our Little League teams.”

From a government revenue standpoint, counties rely on two forms of taxes: property taxes and sales taxes.

“The loss of retail activity on Main Streets and malls is having a negative impact in our communities,” said Stephen J. Acquario, NYSAC executive director. “We are losing businesses. We are losing jobs. We are losing retail activity, and we are losing revenue. Local governments are struggling with high property taxes and need alternate forms of revenue to provide essential public services and alleviate the need to ask property taxpayers for more. We need marketplace fairness in New York now.”

Property taxes were capped at about a 2 percent growth rate by the state in 2011 and sales tax revenues have been largely stagnant since the recession of 2008. The result is that counties and local governments that rely on these two forms of revenues have been dipping into reserves, cutting services and programs, reducing their workforces, and delaying critical infrastructure projects.

“If we do not modernize our sales tax system, counties will have no choice but to start raising property taxes to sustain our programs and services, and no one wants that,” said NYSAC Vice President Chuck Nesbitt, the Orleans County Chief Administrative Officer. “We need to level the playing field for the businesses in our community, and we need state lawmakers to enact the Internet Fairness and Conformity Act in this year’s state budget.”

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