The New York Sun, which originally broke the New York affiliate tax story back in November 2007, has news today that NY Senator Chuck Schumer, and Representatives Anthony Weiner and Gregory Meeks are opposed to Governor Paterson on the tax.
Three New York lawmakers on Capitol Hill are siding against Governor Paterson in an intensifying battle between the federal government and the states regarding the taxation of interstate commerce.
Senator Schumer and Reps. Anthony Weiner and Gregory Meeks are co-sponsoring federal legislation that could undercut taxes New York State imposed this year on banks and online retailers, such as Amazon.com, that have customers in New York but no offices here. All three lawmakers are Democrats, as is Mr. Paterson.
The federal bill, known as the Business Activity Tax Simplification Act, prohibits states from taxing the income of companies that don’t have a “physical presence” in the state. It has been championed by businesses looking to lighten their tax burden but has drawn stiff resistance from many states eyeing greater revenues and expanding Internet retail sales.
Glad to see these guys are looking at the big picture…
Mr. Weiner, a candidate for mayor in New York City next year, defended the bill in a statement. “New York’s business community, particularly our vital financial services sector, has been hammered with business activity taxes in states and localities where they do not operate,” he said. “It’s bad for our economy and kills jobs. Period.”
It warms my heart to see some common sense in Washington.
How about it, Hillary… are you going to fight the good fight with them?
In response to the New York Sun story yesterday, New York City Mayor Bloomberg has come out on the side of Governor Paterson.
Weighing in on the issue yesterday, the mayor said it was a matter of fairness for a Web site such as Amazon.com to pay the same tax rate as a local bookstore.
“If you are going to have a tax system, one of the essences of it should be that it is fair,” Mr. Bloomberg told reporters, responding to an article in yesterday’s New York Sun. “And it just inherently makes no sense whatsoever to tax you if you want to buy a book from Amazon differently than if you want to buy a book from a bookstore. I’d feel the same way about the food vendor with the cart outside or the coffee vendors. They should be paying the same kind of sales taxes as somebody who rents a store and sells coffee from that store.”
That’s a weird parallel. As far as I know, none of the food or coffee vendors are handing customers their hot dogs and coffees from outside the state.
This is the same Mayor Bloomberg that was celebrating the Internet with his launch of Internet Week New York last month:
“There is no better time to celebrate our digital media sector, and these events will serve to better connect the various digital companies and online participants that make up the City’s thriving Internet industry.”
If this law lives and is adopted by states across the country, it could put a dent in “the City’s thriving Internet industry” as folks in Toledo, Biloxi, and Austin start paying sales tax for New York companies with no nexus in their states.