Online Retailers Beware: States Broaden the Tax Net

Now commonly referred to as the “Amazon Bill,” states across the country are looking at the precedent set in New York and considering their own legislation to expand sales tax collection requirements to online sellers. North Carolina and Rhode Island have enacted legislation modeled after the New York law. In other states, the debate has generated much attention. California Gov. Arnold Schwarzenegger issued a press release in July saying that he would veto any such legislation after Overstock.com announced it would pull all of its affiliate programs from California if an “Amazon Bill” was adopted there. A similar result played out in Hawaii, where its governor vetoed an “Amazon Bill” under pressure from online retailers. As legislative sessions gear up for another round of potential revenue raisers, the possibility of extending sales tax collection responsibility to out-of-state online retailers will continue to generate a great deal of interest.