Engaging in a healthy dialogue with a Webster constituent, Senator Moore was recently sent an e mail regarding one of the Senator's press releases, calling for the passage of the Main Street Fairness Act.  The bill, which has been filed by Massachusetts Congressman William Delahunt, would allow states that are in full compliance with the Streamlined Sales and Use Tax Agreement to collect sales tax on remote purchases (the most common examples being Internet sales and catalogue sales).  While sales tax is rightfully owed on such purchases, consumers are able to escape the charge due to loopholes in existing tax codes.  While the Webster constituent shared his point of view that the collection of online sales tax would be an additional tax, Senator Moore illustrated that it would be an enforcement of exisiting tax policies.  Read more about the Main Street Fairness Act, and the Webster constituent and Senator Moore's thoughts below:

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From: A Webster Constituent
To: Senator Moore

Senator:

Here is a case where we probably disagree a great deal. MA taxes are already too high and this legislation will just raise the tax burden on citizens even further. I'm not sure where you think this "hundreds of millions of dollars for the Commonwealth " will come from, but I know it will be my pocket and yours. Every town in MA is trying to find more devious and sneaky ways to raise taxes on their citizens because for some reason our leaders feel they are entitled to spend more and more even when the taxpaying public income is less and less. Now you want to tax all my on-line purchases, just further raising my tax burden.

I really get angry at stuff like this because there are incredible amounts of state and federal money already be wasted at my expense, and huge increases in my taxes are coming next year due to the corrupt health care tax increase, plus the local tax increases that were just passed, and now tactics like this to further target citizens at the retail level. You really need to think again about how much the tax burden on citizens is going to grow in the next few years at all levels. As I have also pointed out before, there is no magic source of money from retailers and manufacturing companies. Every time you increase their taxes, that burden is passed directly to consumers who pay all corporate and business taxes through fees and higher costs for good. This tax would be yet another vehicle raising my cost of living so the state can have more money to burn. The amount of additional federal taxes I will soon be paying due to the health care reform is a staggering amount of money, literally thousands more each year. I don't have any more to give. And what additional services or benefits will I get for that money or this extra on-line retail tax money? I think we both know the answer to that is nothing I can use. Tuition at all state colleges are up, all local taxes are up, all fees and service costs are rising, where does it end and when is enough enough?

I wish we would spend more time trying to get spending in line with personal income, improve the efficiency of state government, reduce the amount of excess unfunded mandates to cities and towns, reduce the needless intrusive regulations on citizens, and much less time trying to find new ways to raise taxes on people who work hard to earn their livings. Life is tough enough these days and it will only get worse in the next few years. This is badly timed, insensitive, and insulting.

Thanks for listening

A Webster Constituent

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From: Senator Moore
To: Webster Constituent

Dear Webster Constituent:

You're right. We disagree. The purchase of goods via the Internet are, by law, subject to the sales tax. Purchasing goods from out of state vendors to avoid paying the sales tax hurts Massachusetts businesses and are fees that are - according to the US Supreme Court - legitimate. I am not supporting ANY increase in the sales tax or in your tax burden! You only need to pay the current tax. It's not an increase in taxes! Why should you avoid a legal tax while other residents are required to pay the tax for the same item purchased by them? What is "devious and sneaky" is that some people use the Internet to avoid a tax that the Supreme Court has stated is legal and that you owe, but that the current federal law does not allow the state to collect without a Congressional Compact. We'll just have to agree to disagree on this one.

Senator Moore

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From: Webster Constituent
To: Senator Moore

Senator,

I do not purchase goods on-line to avoid sales taxes. I purchase goods online because in many cases the prices and services are better than what I can get in a box or retail store. Since there is no tax charged to me, the advantage is even better. If the law is changed and I am now charged a tax on these purchases then you certainly are supporting a very specific and relatively expensive increase in my tax burden. It's just the same as when Charter communications raises my internet service bill from $35 to %70 in one year. They call it an expired discount. I call it a 100% increase in their fees. You can call things anything you want but when I need to pay more money for the same thing I purchased previously, this is an increase in my tax or expense burden. The point is that regardless of the legal technicalities, today there is no sales tax charged, tomorrow there will be. That's a tax increase in my world and why I think it is insensitive and badly timed.

I actually appreciate and respect what you are trying to do, but I think it is inappropriately characterized as righting a wrong. I don't believe states should have the right to regulate commerce that takes place outside their borders, any more than the US should have the right to regulate commerce in Asia. The sale of a product over the internet takes place at the place of origin, not the at the place of delivery, and therefore should be the jurisdiction of the states where the business owner(s) reside, not the address of their residents. I'm assume you'll disagree but I contend it is just like buying a TV in NH or New York. In New York I pay more sales tax and MA will not give me money back if I drive the TV to my house. But if I buy the TV in New Hampshire MA seems to think they are entitled to get sales tax if I bring the TV home. That's a double standard that internet sales taxes will only further re-enforce. Why is one tax evasion and the other my tough luck? Why, if I live in NY and buy goods by mail order from Michigan, I need to pay sales tax twice? Both in NY and Michigan? Why do I need to pay fuel taxes in MA if I immediately drive into CT? Why do I also need to pay fuel use taxes in CT if I drive through the state with my commercially registered truck using diesel I bought in MA? The answers to these questions get to the heart of the problem with state jurisdictions over sales tax revenue. Every state wants it both ways. Pay me at point of sale, and pay me again when you bring products in that you bought somewhere else.

If you want to fix this problem correctly, get out in front of the whole interstate commerce issue and fight for uniformity in taxes and fees across state boundaries. Create a system where goods and services are equally taxed in all states and the burden is equally shared among all consumers. Remember, as I have told you before, I do support a national sales tax and consumption taxes in general, as long as they are equitable and we dial down the usury income taxes in exchange. We should be rewarding success, not punishing it. Get behind this and I'll support you 100%! Just find new ways to take money from my pocket, and we are on different pages.

Thanks

A Webster Constituent

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From: Senator Moore
To: Webster Constituent

Dear Webster Constituent:

If you purchase goods online, the sales tax applies. The Supreme Court in two cases has stated that it is a tax that is owed, but that states lack the authority to collect it from businesses in another state. If the Congress approves a compact, the state will be able to enforce the existing tax law. As it is now some businesses will impose the sales tax for on line sales and others do not. Since you suggest that you don't purchase goods online to avoid the tax, what's the problem with paying a tax that is legally owed? It is, in fact, a loophole in the existing tax system that allows some people to avoid paying a legal tax.

If you buy an item in another state and pay the tax, you are not taxed double since proof of paying the other state's tax exempts you from paying the state use tax. If you buy an item in a non-sales tax state, like NH, the state can assess the use tax. The problem is that it is difficult to collect from the individual after the sale. That's why the major Internet companies are willing to collect the tax and remit it to the appropriate jurisdiction. In return the state receiving the tax agrees to accept the host state audit. Otherwise, businesses are subject to audits by nearly a thousand jurisdictions (states, cities, counties) that levy a sales tax. Twenty-four states have already adopted the streamline sales tax and are seeking approval of the Congressional compact to authorize remote collection. It's not a new way to take money from your pocket. You owe the tax now. It is just a more equitable way to collect the same tax from everyone regardless of where they purchase the goods.

Senator Moore

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From: Webster Constituent
To: Senator Moore

Senator Moore:

I think this is a valuable discussion. Thank you for your time to continue it. I sincerely believe you have an open mind and can eventually appreciate where I am coming from. The problem is that I hear you debating this topic as a lawyer, not as a citizen taxpayer like me. While I am more than capable of appreciating the legal arguments, you have given, they are not relevant to my case. You asked me "what's the problem with paying a tax that is legally owed?" Since 2004 I have paid a grand total of $160,428 in federal, state, and local taxes based on income. Yes, you read that right. over $160 thousand dollars in taxes related to income and property! Taxes "legally owed" as you phrased it. This does not even include sales taxes of any kind which I do not keep detailed records of. I'm a modest guy with one home and a combined family income well inside the middle class income bracket. In the last few years I have seen my tax burden relative to income increase substantially. In 2009 I paid over $40K in income and real estate taxes alone. As this has happened I have heard endless political spin and euphemisms designed to convince me that while my tax bill goes up, I am not paying any "new" taxes. The Obama Health Care Tax Increase bill forces another $10K - $20K of intangible income to magically appear on my W2 raising my federal income tax bill by another $5K or more next year. If you call that anything but a tax increase you are being dishonest. I'm frustrated and angry that all this money is being taken from me, and then legislators have the nerve to tell me I am not paying enough and they are "entitled" to take even more money from me for no tangible increase in services or benefits of any kind -- BS again!

What do I get for the MA state portion of that $160,000? Not much that I can find. The state government, except for you personally, is largely inaccessible to me. The prima-dona that runs the registry won't stoop low enough to return a phone call or letter to a lowly citizen like me. Those arrogant snobs at the Attorney General's office never met a consumer complaint worth wasting their time on. It's all high profile news stories for them. Even the governor talks on radio about more open government but his own office won't return an email or phone call unless it has political value to his re-election. Forget people like me -- we are perceived as whiners and mostly invisible to the state in any way. We're an annoyance to ignore while we keep paying 10s of thousands in state taxes every year. You are literally the only person in MA government I have found that is even willing to discuss issues with taxpayers like me and why I resent the implication that after all that money taken in taxes I am still not paying my fair share because I buy some auto parts on-line. For this reason I will continue to press you to reconsider future new tax legislation like this latest effort.

I looked up my 2009 online spending incidentally. My sales tax bill on out of state on-line purchases would be a little over $1,000 more. If I buy the same amount of stuff online next year your efforts will cost me another $1,000 more and will make no real difference in my decision to purchase on-line anyway. In other words, you get my money but I won't change my buying habits anyway. Isn't that the stated purpose of your bill, to level the playing field with local brick and mortar retailers? Well, you are not going to fix that with sales tax policy. You need to do many more things to make businesses in Webster competitive with on-line retailers. For starters, why is business income taxed at all? It's just another hidden tax to me as are unfunded state mandate on cities and towns, which I also find a cowardly way to increase my taxes at the local level without telling me the truth at the state level. Why not eliminate all income taxes to retailers involved in real consumer retail business when the business is less than $20M annual revenue, and phase in a tax after that? That would not only put 20 points of margin back into main street retailers, but it would address some of the Wal-Mart problem as well. Additionally, why do business need to pay higher rates on utilities, and why are their real estate tax rates different? It's the same electricity, water, and dirt as the stuff at my house. Make the tax and expense structure more equitable to small business and they will then be able to compete. I have lots of ideas about this but I doubt there is much that can or will be done. I have a lot of sympathy for local retailers and I support them as much as I can but for me cost matters also.

This is my long answer to why I care. Your effort to enforce sales taxes on internet sales is literally just another tax increase to me on top of all the other crippling taxes I pay with no likely offsetting advantage except more money for the state out of my pocket. Hence, on all practical measures this is a tax increase and I do not support it! Your legal argument does not equate to a moral argument that would persuade me that the state is "entitled" to the money or that it would make any difference on the health of my local retailers. Hence I do not support this bill or any other similar efforts.

I hope this helps you see the problem from my point of view. I look forward to your further observations.

Thanks

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From: Senator Moore
To: Webster Constituent

Dear Webster Constituent:

Here is a summary of the Main Street Fairness Act. You can find a great deal of additional information at www.sstregister.org 

Main Street Fairness Act 

Objective: To encourage members of Congress to co-sponsor/support a House and Senate version of legislation entitled, “The Main Street Fairness Act” that authorizes states to collect sales and use taxes on out-of-state sales. 

Key points: 
(1) The Streamlined Sales and Use Tax Agreement substantially simplifies state and local sales tax systems, removes the burdens to interstate commerce that were of concern to the Supreme Court, and protects state sovereignty. In addition, the agreement “levels the playing field” between local and out-of-state merchants and benefits all retailers by reducing their administrative costs. 

(2) The Agreement and state compliance to the Agreement removes the liability for mistakes in collection from the seller to the state. The liability for the collection of the correct sales tax rate rests with the state, sellers will be held harmless for calculations and collections using the certified technology. 

(3) A recent national study commissioned by a partnership of business and government organizations, shows that the retailers cost of compliance burden to collect sales taxes averaged more than three percent of the sales tax collected, a $ 6.8 Billion annual cost to retailers at 2003 sales tax levels. For small retailers, between $150,000 and $1 million in sales, the compliance cost averaged 13.47 percent or about $2,400 per small retailer. 

Seller Cost Per Total Sales Tax Collected Average Cost
$150,000-$ 1M 13.47 % $2, 400
$1M – $ 10 M 5.20 % $5, 279
$10 M + 2.17 % $118,233

(4) It is expected that implementation of the Streamlined Sales and Use Tax Agreement will reduce and overtime eliminate all cost of compliance burden on sellers to collect state and local sales taxes.

(5) It is estimated that in 2008, state and local governments lost at least $ 18 billion in uncollected sales taxes from out of state sales, with over $7.7 billion alone from online sales. As electronic commerce continues to grow so will the loss to state and local revenues. *

*“State and Local Sales Tax Revenue Losses from E-Commerce: Estimates as of April 2009” By Dr. Donald Bruce and Dr. William Fox, Center for Business and Economic Research, the University of Tennessee. 

(6) Twenty-three states, representing over 30 per cent of the country’s population, have already been certified as being in compliance with the Streamlined Sales and Use Tax Agreement, which simplifies state sales tax systems and removes the burdens and costs of the current system imposed all sellers. The Agreement is operational in the following states: Arkansas, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia and West Virginia. The Agreement will be operational in Wisconsin later this year. 

(7) Since October 1, 2005, approximately 1,150 remote retailers have volunteered to collect out –of-state sales taxes for these states. To date member states have collected over $350 million in new sales tax revenues from these volunteer sellers, which previously would have been uncollected. 

(8) The Streamlined Sales and Use Tax Interstate Agreement provides the states with a blueprint to create a simplified sales and use tax collection system that when implemented, allows justification for Congress to overturn the Bellas Hess and Quill Supreme Court decisions.

(9) This is not a new tax on Internet commerce, it merely provides states the mechanism to collect a tax on consumption already levied by the state but not collected. (The 1967 Bellas Hess case and the 1992 Quill v. North Dakota case—which acknowledged that consumers owe the sales tax when they purchase goods through catalogues or over the Internet, but ruled that states cannot force retailers to collect the tax.)

(10) According to NCSL April 2009 State Budget Report, states are facing a cumulative budget shortfall of nearly $103 billion for 2009, and estimates show that the budget gap for 2010 will be over $122 billion. Closing the loophole on sales tax collection, will provide the states with almost $18 billion in previously uncollected revenues and these revenues are not just a one-time addition but will be recurring annually. 

(11) By passing the legislation, Congress would, in the words of Congressman Roy Blunt of Missouri, be providing “true fiscal relief for the states that does not cost the federal treasury a single cent.” 

(12) The proposed legislation has the strong support of the communications industry, including the landline companies, the wireless industry, and cable providers as the legislation would require the sales tax simplifications be applied to the administration and collection of state and local taxes on communications transactions.

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From: Webster Constituent
To: Senator Moore

Senator,

I'm a bit surprised you did not attempt to address any of my other points but as far as this matter goes, the talking points below generally re-enforce my gut reaction. This is a way for the states to get more money more easily from consumers under the cover of existing legislation and legal precedent. You are supporting an $18 Billion tax increase at the retail sales level on American consumers. The fact that it is simple and efficient to get online retailers to collect, and the fact that 20 states support it, only means you have a lot of support for it. That alone does not make it right nor does it make the timing any better. Making it easier to collect taxes does not equate to the justification for the tax in the first place. This is interstate commerce and as I tried to argue before, I don't believe it is the right of MA to collect taxes on a transaction that takes place in another state anyway. With the law against me on that argument, I would think at least that $18 Billion would be better off in consumer's hands than the state's hands. I think this is a cooperation of the many states to find a way to raise taxes while disguising it as something else. That's just my opinion, but I suspect I'm not the only one who feels this way. 

According to NCSL April 2009 State Budget Report, states are facing a cumulative budget shortfall of nearly $103 billion for 2009, and estimates show that the budget gap for 2010 will be over $122 billion. Closing the loophole on sales tax collection, will provide the states with almost $18 billion in previously uncollected revenues and these revenues are not just a one-time addition but will be recurring annually. 
-- So, $18 Billion in previously uncollected revenue would flow from consumer's pockets to the states. It's $18 billion in previously uncollected revenue. It's a new tax on consumers.

(11) By passing the legislation, Congress would, in the words of Congressman Roy Blunt of Missouri, be providing “true fiscal relief for the states that does not cost the federal treasury a single cent.” 
-- No, but it will cost American consumers $18 billion in new taxes they do not pay today. Whether I pay this money to the Feds or the State or the town of Webster, I pay more money when this effort passes. There is no "Money Heaven" that just rains revenue on us. It's personal income you are taking away from us.

Uncollected revenue is revenue that consumers can spend on other things to help grow the economy. Eventually, you get more than this back in a share of the economic growth. If you take it away, it's $18 billion a year that will not go to economic growth! Why can't we at least agree on that point? Why not just raise the sales tax to something like 15%? Make it the highest in the US, though NY would just raise theirs the next day :) Then you balance the state budget in one year. It's not a new tax because by your argument there was already a sales tax, we just weren't paying as much as we should be. We were getting a "discount" that expired - just like cable TV.

It's more than semantics and I'm not trying to be sarcastic. I really mean it when I say taxes are crippling me and people like me. Efforts like this to streamline the collection are no more justified than new tax bills themselves. It's all the same when I fork over my paycheck to the government and watch most of the money wasted on things that do not benefit us. Try paying for 8 years of college for 2 kids with no financial aid to qualify for. Add in a mortgage, a car payment, a LOT of taxes, insurance, and everything else and then see why I think I'm getting screwed. Think about what else I could have done with $160,000 over the past 6 years. Paid for my kid's college, paid off my house? How about started another business that would employ more people and grow the economy. 

Anyway, good luck. It looks like you will have no problem getting this to pass. There is a lot more support lately to raise "revenue" than there is to help taxpayers. I don't know when we blew past the point of sanity but if only 19.0% of voters think taxes are a critical issue then you clearly have enough support to keep digging deeper. I think your views on a lot of other issues are right on and I will continue to vote my support for you -- until I lose my house and need to move to South Carolina or Arkansas where I can afford to live on welfare. Then, others can pay for me...

Cheers

Webster Constituent

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From: Senator Moore
To: Webster Constituent

Dear Webster Constituent:

If someone doesn't want to pay a sales tax, they don't have to buy the item. The tax is a small fraction of the cost. If the tax is the difference between buying something or not being able to buy it, the person probably doesn't really need the item. It's like the old saying about an expensive, luxury item - if you have to ask how much, you probably can't afford it. You're only confirming that people buy on line to avoid the sales tax. It is not a tax increase, but the same tax that's paid by everyone else, especially those who buy the product in their own state creating local jobs for their neighbors. As the Supreme Court has determined, the tax is legally owed by the purchaser. If the Congress approves an interstate compact among the states, the transaction does not violate the Interstate Commerce provisions of the Constitution.

By the way, Arkansas is already a participating state in the interstate agreement. The loss of sales tax from Internet sales accounts for 114% of their FY 12 state budget gap. South Carolina is a state, like Massachusetts, that is working toward compliance with the interstate agreement and the lost revenue from Internet sales tax receipts would cut their FY 12 budget gal by 20%. You can be reasonably sure these states and most others will participate in this program. So don't move on account of this tax program.

Senator Moore

PS - Here's some additional information on the effort underway.

Internet Sales Tax Fairness

In a 1992 decision, Quill v. North Dakota, the U.S. Supreme Court ruled that retailers are exempt from collecting sales taxes in states where they have no physical presence, such as a store, office, or warehouse. (The legal term for this physical presence is "nexus.") Although the case dealt with a catalog mail-order company, the ruling has subsequently been applied to all remote sellers, including online retailers. The Court said that requiring these companies to comply with the varied sales tax rules and regulations of 45 states and some 7,500 different local taxing jurisdictions would burden interstate commerce. 

In its ruling, the Court specifically noted that Congress has the authority to change this policy and could enact legislation requiring all retailers to collect sales taxes without running afoul of the Constitution. "Congress," the Court declared, "is … free to decide whether, when, and to what extent the States may burden interstate mail-order concerns with a duty to collect use taxes." 

Today, software has largely eliminated the difficulty of calculating and remitting sales taxes for the country's many state and local jurisdictions. Indeed, Amazon.com, which opposes extending sales tax to online retailers on the grounds that it would be "horrendously complicated," collects sales taxes nationwide for Target as part of its management of the chain's online business. 

Yet Congress has so far failed to extend sales tax collection to online retailers. The result is a public policy with at least three pernicious impacts:

• It disadvantages local businesses. Exempting online retailers from having to collect sales tax, as regular stores must, gives these companies a 4 to 9 percent price advantage over local stores — a sizable competitive advantage in retailing. 
• It undermines state and local governments by reducing tax revenue for schools, police, and other services. This revenue loss that will only grow as internet sales continue to displace in-store sales. Currently, 45 states assess sales taxes, from which they receive about 25 percent of their total revenue each year. A 2009 University of Tennessee study estimated that uncollected sales taxes on e-commerce cost states $7.7 billion in 2008. 
• It makes a regressive tax more regressive, because only those with internet access, a credit card, and a home or workplace where they can accept daytime deliveries are able to take advantage of the tax exemption. 

(It is important to note that, while remote sellers are not required to collect sales taxes, the tax is still owed by the individual who made the purchase. Individuals are suppose to keep track of these purchases and pay an amount equivalent to the sales tax as a "use" tax on their state tax returns. Few people do, however, and the use tax is almost impossible to enforce, which effectively exempts these purchases.)

The Main Street Fairness Act 

There are two primary strategies that states are pursuing to move toward a level playing field in which all retailers are subject to the same sales tax requirements. 

One involves persuading Congress that collecting sales taxes for numerous state and local jurisdictions is no longer a burden for remote sellers. As noted above, software makes complying with state and local sales tax rules much simpler than when the Supreme Court issued its 1992 ruling. 

To further simplify things, the National Governors Association established the Streamlined Sales Tax Project, a multi-state effort to simplify and align sales tax policies. As of April 2009, 41 states and the District of Columbia had approved an interstate agreement that establishes uniform sales tax rules and definitions, and 23 states had taken the next step of passing implementing legislation. 

Under this legislation, states and cities still have the authority to determine what goods are taxed at what rate, but must adhere to rules governing such things as how and when they can change tax rates, as well as uniform definitions (e.g., whether marshmallows are considered food or candy for tax purposes). 

Having aligned and greatly simplified their sales tax policies, states are hoping to persuade Congress to pass the Main Street Fairness Act, introduced in 2009 by Senator Mike Enzi and Representative Bill Delahunt. The bill would authorize those states that have implemented the Streamlined Sales Tax to require large online and catalog retailers to collect sales taxes. (Small businesses would still be exempt.)

Clarifying Nexus

The second strategy states are pursuing does not rely on Congressional action, but instead uses existing state authority to clarify what constituents "nexus" for the purposes of sales tax liability. (Under the Supreme Court's ruling, only retailers that have a physical presence, or nexus, in a state must collect sales tax on purchases made by that state's residents.) 

In the past, many national chains, despite having nexus in every state by virtue of their stores, claimed their e-commerce sites were distinct legal entities, unrelated to their bricks-and-mortar stores and therefore were exempt from collecting sales taxes. This practice is known as "entity isolation."

State action in recent years has sharply curtailed the number of so-called "clicks-and-mortar" retailers using entity isolation to skirt collecting sales taxes on their online operations. In 2001, California became the first state to issue an administrative ruling against the practice of entity isolation when its Board of Equalization ruled that Borders.com was not a separate entity, but the online extension of the chain Borders Books & Music and therefore must collect sales taxes on sales to California residents. 

In the following years, several states amended their sales tax laws to clarify that the e-commerce arms of national chains still have nexus and that entity isolation does not absolve them of their obligation to collect sales tax. (Below we include policy examples from Arkansas and Indiana.)

Increasingly concerned about the threat of court action by states and the potential liability, as well as the complexity and inefficiency of attempting to treat the e-commerce side of their operations as a separate company, in 2003 most national chains cut a deal with the states in which they were forgiven all of their back taxes in exchange for collecting sales taxes online from that point forward. Although most national chains now collect sales taxes on online orders, there remain a few that do not.

In 2008, New York became the first state to further extend the definition of nexus to cover some web-only retailers, including Amazon.com. The legislature passed a bill, accompanying its budget, that said that web retailers have nexus in New York and must collect sales taxes if they have sales affiliates in the state that generate a combined total $10,000 a year or more in revenue for the retailer. (Sales affiliates are individuals or organizations that are paid commission for linking to the online retailer's web site. Amazon.com has thousands of sales affiliates nationwide, as do many other online retailers. In all, more than 30 companies are covered by New York's provision.) 

Now, several other states are considering legislation modeled on New York's. 

More information

• The American Booksellers Association has created e-fairness action kits for nearly every state. The kits include fact sheets and template letters and op-eds. 
• States could eliminate 13 percent of their combined budget gaps if online retailers collected sales tax, according to a May 2010 analysis by the National Conference of State Legislature.