The U.S. Supreme Court’s June 21 decision in South Dakota v. Wayfair will allow states to mandate a sales tax for items purchased online from out-of-state retailers — and many local retailers want New York to ensure that a sales tax is charged regardless of the sites that online shoppers use.
“Awesome — I love it,” Jeff Rosenthal, owner of Home Appliance in Oceanside, said of the development. “It’s only fair.” He noted that after 37 years in business, selling everything from gas grills to OLED television screens, electronic products are the category in which he has the most trouble competing with online shops when it comes to pricing.
Residents, Rosenthal said, “want to shop with the local guy, but with the internet, they also want to get the lowest price.” In a system where online retailers are not required to charge sales tax in the states where they sell, he added, it is the so-called “local guys” who are struggling the most to compete.
“I’ve got a great market share for where I am,” Ros-enthal explained, “but [sellers] could be all the way across the country, and they’re stealing my market share.” He added that it should be a no-brainer for state lawmakers to follow through with a law to collect a sales tax, which would provide New York with a windfall of funds. “How could they not pass it?” he said.
Dozens of Long Island business owners gathered in Plainview to rally for a state law mandating online sales taxes on July 16 — which was Amazon Prime Day. They also pushed for websites such as Amazon, Overstock and Wayfair to implement the tax before legislation forcing them to do so is passed.
While business owners said at the rally that they are confident that such legislation will be approved, because of strong support from a number of state and local legislators, they are hoping for a special session to address the issue before state lawmakers reconvene in January.
Mark Taglianetti, owner of Mook Print and Design, a T-shirt print shop in Island Park and a former Island Park Chamber of Commerce president, said that an online sales tax law could have both positive and negative effects on his business, which does sometimes sell to out-of-state clients.
“We sell mostly to people who are reselling the stuff,” he explained, “so it doesn’t really affect us in that matter. The only person that it affects is the end user, which is the mom who is buying shirts for her soccer team, or for a birthday for their kid.”
Taglianetti did say that he has had to charge sales tax in California, where he has a client who provides shirts to local YMCAs free of charge. Since the customer is giving the shirts away, he is considered the end user. “Sales tax only has to be paid once,” he explained. “It doesn’t have to be paid every time the product changes hands.”
The law passed in South Dakota after the high court ruling with stipulations: Out-of-state online retailers charge the tax only if they clear $100,000 in sales in South Dakota, or have at least 200 transactions with South Dakota customers.
Nassau County Executive Laura Curran said the ruling “gives a tremendous boost of confidence to local businesses that struggle to compete with internet commerce.”
County Legislator Arnold Drucker, who attended the July 16 rally, explained that a mandated online sales tax could help Nassau and Suffolk counties shrink their budget deficits.
“It would be a win-win all around. It would be a win-win for the state, for Long Island and for the community,” Drucker said. “America was built on brick-and-mortar stores. They are the middle class, and we’ve gotten away from supporting them. This could be a wake-up call to support local businesses.”
James Gazzale, a representative of the state Department of Taxation and Finance, said earlier this month that state officials were reviewing the Supreme Court decision.
Taglianetti acknowledged a New York online sales tax law could hurt smaller online boutiques such as those selling custom-made articles of clothing and accessories, but said he believed the additional revenue for New York would ultimately be a boon.
“In reality, it’s not hurting anyone,” he said, “because the sales tax is held, paid quarterly and then helps fund state programs.”