Commentary: An Unconstitutional Interstate Sales Tax

Today, New York saddles taxpayers with the third-highest tax burden in the nation. But not content with taxing its own citizens and businesses to the max, the Empire State is now unleashing its tax collectors on the rest of the nation. A first-of-its kind law recently passed in New York places new sales taxes on catalog and online retailers in every state of the country. Retailers that have no physical presence in New York, but sell products to New Yorkers, are now expected to collect and send tax revenues to the treasury in Albany.Adopted as part of its new state budget, the bill requires out-of-state retailers to collect sales taxes on purchases made by New York residents. Under the law, out-of-state retailers must register as vendors with New York by June 1. Failure to comply brings civil and criminal penalties. New York tax department officials have indicated that out-of-state retailers who refuse to register could face auditing and years of back taxes for any sales made to New York customers. By the terms of the pending legislation, New York even asserts taxing authority over online retailers who simply pay for online ad referrals from New York-based Web sites.

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