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Cuomo proposes to apply sales tax to all internet sales

The move is viewed as a way to level the playing field for traditional stores.

Gov. Andrew M. Cuomo delivers his State of

Gov. Andrew M. Cuomo delivers his State of the State address in Albany on Jan. 15. Photo Credit: AP/Hans Pennink

ALBANY — Gov. Andrew M. Cuomo is proposing to take advantage of a recent U.S. Supreme Court ruling that would allow New York to charge sales tax on all internet sales, potentially adding to the cost of internet purchasing while providing an even playing field for traditional stores.

Cuomo proposes requiring all companies that sell products over the internet to collect state and local sales tax — about 7 percent in much of the state — which he said would result in $250 million in tax revenue to the state per year.

The measure has been sought for years by traditional stores with a physical presence in the state as internet sales grew. A new coalition of chambers of commerce on Long Island, along with Suffolk County Executive Steve Bellone, plans to lobby for the measure in Albany. The state budget is due April 1.

Without it, local businesses say they are at a disadvantage as internet-based sellers can avoid charging sales tax.

“It is counterproductive to principles of fairness, harmful to local economies, bad for Main Street and retail jobs,” said Morris Peters, Cuomo’s budget spokesman.

The same bill was defeated last year by the former Republican majority of the state Senate, which called it an added cost for living in New York.

The effort was also stymied nationwide because of 50-year-old trade laws. Those laws prohibited states from forcing internet retailers without “brick-and-mortar” facilities within the state to charge sales tax. That changed in June, when the U.S. Supreme Court removed the requirement that a seller have a physical presence in a state in order to be subject to the state’s sales tax.

“We oppose new taxes, including Governor Cuomo’s proposed new tax on internet purchases,” said Scott Reif, spokesman for Senate Republicans, who became the minority party in the chamber this year.

Currently, New Yorkers are asked to estimate the sales tax owed on their internet purchases and account for it in their state income tax returns. Some major internet retailers without stores in New York already have agreed to collect sales tax. This measure, if passed, would require all internet retailers to pay the tax.

“While this was ‘dead on arrival’ with the Senate GOP, our new Democratic Legislature will deliver results for Main Street businesses on Long Island,” said Jason Elan, spokesman for Bellone.

There was no immediate comment on the proposal from the Democratic majorities of the Senate and Assembly, which are negotiating the state budget with Cuomo.

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