March 7, 2017

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Tech companies Amazon, eBay set to fight plan to tax online marketplaces

By
Kenneth Lovett
New York Daily News

(This article originally appeared in the New York Daily News on March 7)

Tech companies and online sellers are set to kick off an aggressive campaign against Gov. Cuomo’s plan to require online marketplaces like eBay and Amazon to collect sales taxes on any transaction involving buyers from New York.

The coalition of tech groups plan to send millions of emails, generate thousands of phone calls, and use other means to rev up New Yorkers to fight the plan.

The coalition will target 20 state legislators in hopes of pressuring them to oppose the Cuomo proposal as state budget talks are set to heat up in coming days.

The coalition is headed by TechNet and WE R HERE, which between them represent thousands of technology officials and businesses nationally.

“The issue is in the hands of the Legislature right now,” said Phil Bond, executive director of WE R HERE. “They need to say they want to go a different way.”

Cuomo’s plan, said to be first in the nation, would require online marketplace providers like Amazon, Etsy, and eBay that process a minimum of $100 million in sales a year from New York buyers to collect sales taxes on behalf of third-parties who use their platforms and are located outside of New York but sell goods to state residents. Sales taxes are already collected when a third-party seller is located in New York.

The coalition argues the plan would harm consumers who would be forced to pay more while making it more difficult for tech companies to grow in New York. “It sets a dangerous precedent and it’s a slippery slope,” said TechNet’s Matthew Mincieli of Cuomo’s plan. “If New York does it, New Jersey is going to say, ‘we need to do it.’ ”

The Cuomo administration estimates the change could bring in about $200 million in new state revenue over the next two years.

"We understand these on-line stores would prefer to let the loophole stand - it gives them a competitive advantage over New York's brick and mortar retailers - but the tax code should reflect the principles of fairness and equal treatment,” said Cuomo budget spokesman Morris Peters.

A poll commissioned by the coalition of tech companies found 69% of New Yorkers oppose the proposal.

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