Posted by Janet Attard
Legislators, Heads Up: Before you enact laws that you think might bring in more money to your coffers, consider what those laws do to the small businesses in your state – and how much you’ll lose in both sales tax and income tax when those small businesses go out of business as a result of your legislation.
Case in point: New York State’s recently passed law requiring businesses with affiliates located in New York State to collect taxes on all New York State purchases if NY affiliate sales exceed $10,000, even when the company, itself, does not have a physical presence in the state.
Laws like that can cause companies outside of New York to stop doing business with NY companies. And that’s exactly what at least one company has done. Overstock.com, a company that has affiliates in many states has issued a notice to all New York state affiliates that they are being dropped from the Overstock Affiliate Program. (Business Know-How is a New York company and is was an Overstock affiliate, however not an active one.)
I don’t know how many New York businesses made a significant amount of their business from Overstock, but if there are any, they now can forget that source of income. And, New York state can forget about income tax they would have collected on the business owners’ earnings.
New York: You’re losing far more than you’ll gain with foolish laws like this one.