The push for a level playing field

Lynbrook merchants’ views on online sales tax mixed

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After a recent U.S. Supreme Court decision, business owners across Nassau County are calling for state legislation that they say would level the playing field between in-state and out-of-state online retailers.
The high 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 levied, regardless of the sites that online shoppers buy from.
Stores based in New York that have an online presence have traditionally had to charge a sales tax on purchases made by customers within the state, but not on purchases by customers beyond New York’s borders.
“It would even the playing field because, as businesses, we have to pay sales tax, and [online retailers often] don’t,” said Bruce Levitt, a co-owner of Mur-Lee’s Men’s & Boy’s Shop on Atlantic Avenue in Lynbrook.
The only way that Levitt’s business can compete with online retailers now, he said, is to “offer better service” and give customers “the opportunity to see and touch the product.” The measure would benefit the local economy, Levitt said, because the state would generate more tax revenue.

Julie Marchesella, a past president of the Nassau Council of Chambers of Commerce, agreed. She estimated that Nassau County could see sales tax revenue climb between $50 million to $100 million if the state were to approve a bill similar to the one passed in South Dakota. Under that law, out-of-state online retailers are required to levy the tax when their South Dakota sales exceed $100,000 or if they have more than 200 transactions with South Dakota customers.
On July 16, which was Amazon Prime Day, dozens of Long Island business owners gathered in Plainview to rally for a state law to charge an online sales tax. They also pushed for websites like Amazon Marketplace, Overstock and Wayfair to implement the tax before legislation forcing them to do so is passed.
While local business owners said they were confident that such legislation would be approved, because of strong support from a number of state and local legislators, they said they hoped lawmakers would hold a special session this fall to address the issue before they reconvene in January.
“I just think that it’s important that the government doesn’t continue to kill small businesses by having these online retailers take advantage of the tax code,” Levitt said.
Nassau County Executive Laura Curran said the ruling “gives a tremendous boost of confidence to local businesses that struggle to compete with internet commerce.”
Long Island Regional Council Chairman John Cameron, of Rockville Centre, said local businesses help the tax base. “When they fail, the commercial tax base is stressed,” he said. “When that happens, residential [property tax] rates have to go up.”
But Jennifer Derrig, the owner of the Lynbrook Irish Shop, said she didn’t think taxing online purchases would be the solution. Enacting such a law across all 50 states would hurt her business, she said.
“While I understand that the states feel they are losing large amounts of sales tax dollars from the internet giant Amazon,” she said, “many online websites are owned by small business owners like myself who couldn’t possibly absorb the expense involved in collecting and filing sales tax in 50 states.”
Several other business owners said they were not familiar enough with the legislation to comment.
James Gazzale, a representative of the state Department of Taxation and Finance, said state officials are reviewing the Supreme Court decision.
The ruling was a departure from the court’s practice of the past 40 years, according to the dissent filed by Chief Justice John Roberts Jr., who was joined by three of the court’s more liberal justices — Stephen Breyer, Elena Kagan and Sonia Sotomayor. Roberts wrote that according to the Constitution, regulating interstate commerce is more appropriately the job of Congress rather than the courts.
With the chief justice in dissent, Wayfair might not be the high court’s final word on the subject. “It was a split decision,” Cameron said. “They’ll probably want to revisit it at some point.”

Timothy Denton contributed to this story.