Biz Leaders To State: Fix Sales Tax Loophole

  An alliance of business leaders and chambers of commerce called on lawmakers to enact legislation that would enable the state to collect sales tax from online retailers.   (Photo/Vision Long Island)

An alliance of business leaders and chambers of commerce called on lawmakers to enact legislation that would enable the state to collect sales tax from online retailers. (Photo/Vision Long Island)

By Peter Sloggatt
psloggatt@longislandergroup.com

In a week when Amazon founder Jeff Bezos was declared by Bloomberg News to be the richest man in history, and the online retailing giant reported record purchases during its Prime Day promotion, an alliance of business groups and retailers called on New York State to close loopholes in tax laws that they say give some online retailers a competitive edge over traditional brick-and-mortar stores.

At a press conference held at PC Richards in Plainview last week, representatives of the Suffolk County Alliance of Chambers, Nassau Council of Chambers of Commerce, Long Island Business Council, Long Island Lobby Coalition, Vision Long Island, and appliance retailer P.C. Richard & Son noted that a recent U.S. Supreme Court decision upheld the rights of states to impose sales tax on purchases made online, but New York is not in a position to benefit from that ruling. According to the group, state law only requires sales tax be collected by online retailers that have a physical presence in the state. Amazon falls under that net because it maintains shipping and warehousing facilities here, but smaller retailers that sell through the Amazon network as well as countless other online stores do not.

“We’re not declaring war on Amazon, Wayfair and Overstock, or any other e-commerce platform,” said Long Island Business Council co-Chair Bob Fonti. “We’re not enemies, we’re competitors. Some of us, at times, are even customers. We are talking, from business person to business person, and saying: It’s the right time to do the right thing.”

Nassau Council of Chambers of Commerce President Francesca Carlow called on online retailers to voluntarily collect and pay sales taxes.

“We all think it’s way past time for e-commerce platforms like Amazon, Wayfair and Overstock to comply with the Supreme Court decision. They should immediately begin collecting and remitting sales taxes on all transactions,” she said.

Vision Long Island executive director Eric Alexander said state legislation is needed, but until any can be enacted, prominent e-tailers should voluntarily comply with the spirit of the Supreme Court decision.

State Assemblyman Andrew Raia said that while Amazon pays state sales taxes, the problem was that third-party sellers that sell through Amazon were not obligated to. In the days following the Supreme Court ruling, Gov. Andrew Cuomo signed an executive order that addresses that situation, Raia said.

Business groups claim the savings on sales tax steer many shoppers to make online purchases, and give e-tailers a competitive advantage

that ultimately costs communities. Not only is sales tax revenue lost, but local business owners and employees that support other local businesses suffer.

While the groups have collectively pressed the state to address the issue during State of the State at Long Island Lobby Day in March, and at a press conference with both county executives in May, they also urged consumers to “do the right thing” and support their communities by buying locally.

Gina Coletti, co-chair of the Suffolk County Alliance of Chambers, said, “When the local toy store, hardware store, sporting goods store or jewelry store stays in business, it uses the local accountant, insurance agent, maybe even lawyer, and more.”