New York governor Andrew Cuomo and the state legislature was getting kudos for scrapping an effort to collect state sales taxes on online transactions.
The proposal would have required online transaction sites including Amazon and eBay to collect state sales taxes from New York residents. Currently, sales taxes can be collected only if the online marketplace is physically headquartered or housed in the state.
That is an attractive prospect for states looking to boost revenues from the booming online marketplace that has taken a bite out of taxable, local, brick and mortar stores.
TechNet, for one, was pleased, having campaigned to get the state budget measure dropped, arguing it would chill economic growth and drive venture capital from the state.
“The decision to keep the marketplace sales tax out of the final budget is a win for online shoppers, e-commerce businesses, and future startups that decide to locate in New York State,” said Matthew Mincieli, northeast region executive director of TechNet, in a statement. “This measure was bad policy that would have set a dangerous precedent across the country.
Democrats in Congress had tried without success to pass a national version of the tax, the Marketplace Fairness Act that would allow states to collect taxes on goods and services purchased by their citizens without regard to where the seller of the goods was based.