ALBANY - Counties are touting Gov. Andrew Cuomo's plan to broaden the state's sales-tax law to capture more online sales as a way to boost their revenues.
Senate Republicans, however, aren't budging.
Cuomo’s $162 billion state budget proposal includes the Internet Fairness Conformity Tax, which would require large online marketplaces like Amazon Marketplace and eBay to collect sales tax on any sales between New York-based buyers and third-party sellers.
County leaders from across the state traveled to the Capitol this week to make the case for the sales-tax proposal, which Cuomo's office estimates would generate $89 million for the state and help close a $4 billion budget deficit for the fiscal year beginning April 1.
Sales tax is split between the state and the counties, with the state charging a 4 percent cut and counties charging at least 3 percent.
"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," Orleans County Chief Administrative Officer Charles Nesbitt said in a statement.
Major online retailers, including Amazon, are already required to collect tax on direct sales to New York residents.
But it's less clear when it comes to so-called online marketplaces, including the Amazon Marketplace, that facilitate sales between buyers and outside sellers.
The marketplaces are required to collect sales tax if the outside seller has a presence in New York. Cuomo's proposal would expand it to require tax collection if the buyer is in New York.
Cuomo's plan would apply to those marketplaces who make at least $100 million in sales.
It's the at least the third time Cuomo has proposed broadening the online sales-tax laws, and each time it has been rejected by Senate Republicans, who maintain control of the Legislature's upper house.
The state budget deadline is March 31 for the fiscal year beginning the next day. And yet again, Senate Republicans have shown no sign of cracking.
“We don’t support raising taxes," Senate GOP spokesman Scott Reif said in a statement last week. "Rather than ask hardworking families to pay more, we’re focused on delivering a budget that protects taxpayers and makes New York a more affordable state to live and to work.”
Cuomo's budget documents argue that the laws surrounding the issue have not kept up with technology and that there is inequity between traditional stores and online marketplaces where the required sales tax is not being collected.
The proposal has also received pushback from the Internet Association, which represents major online retailers and companies, including Amazon and eBay.
The U.S. Supreme Court, meanwhile, is reviewing a dispute over online sales-tax collection, as well.
“This marketplace proposal would only make it harder for the most innovative companies to grow and succeed in the Empire State,” John Olsen, the association's Northeast executive director, said in a statement.
“We strongly urge the governor and legislature to reconsider this proposal until companies and states have more clarity on online sales tax collection from the Supreme Court later this year.”
Rockland County Executive Ed Day, a Republican, said the state's current online sales-tax rules give out-of-state businesses a "competitive advantage “over the brick and mortar stores that are keeping our property taxes in check."
Cuomo's sales-tax proposal would "reduce burdens on small businesses, protect property taxpayers and preserve a critical revenue base all while creating a fairer retail marketplace for our local retailers," Day said in a statement.
