Efforts to Tax Online Affiliate Sales in NY Suspended

Interested in the impacts of online commerce on the local and regional economy? Well, at least one kind of Internet-based retail won't be contributing to the tax base any time soon. Apparently Gov. Eliot Spitzer has hit the brakes on efforts to start collecting sales tax on internet sales made through any type of "affiliate" program (even when the company transacting the sales is not in New York State).

(Affiliate sales are programs where a person or entity can set up an account, link to products on their own web sites, and then receive back a small percentage of any sales made at the company's online store when visitors click through those links and make a purchase.)

Per state budget director Paul Francis, "Governor Spitzer believes that now is not the right time to be increasing sales taxes on New Yorkers. He has directed the Department of Tax and Finance to pull back its interpretation that would require some Internet retailers that do not collect sales tax to do so."

Via The New York Times 'City Room' blog, via Publisher's Lunch