From The New York Sun:

The so-called Amazon tax has been a touchy political issue as Albany has looked for novel ways to fund the state government’s soaring spending amid a predicted drop-off in state tax revenue as the economy slows. The state’s tax department first set its sights on Amazon.com last year when it quietly changed its policy to require some online retailers to begin collecting state and city sales taxes — a combined 8.375% on purchases in New York City — on all orders from residents of New York State.

Hours after The New York Sun reported the initiative, Governor Spitzer pulled the plug on it — temporarily. Last month, the Legislature and Governor Paterson approved a law that requires Amazon.com to start collecting and remitting sales taxes to New York. No other state is requiring the same of online retailers that don’t have a physical presence in the state.

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