For Immediate Release
March 26, 2018
LONG ISLAND COUNTY EXECUTIVES AND SMALL BUSINESS OWNERS CALL ON STATE SENATE TO INCLUDE INTERNET FAIRNESS PROPOSAL IN STATE BUDGET
Proposal Would Level Playing Field for Brick and Mortar Stores
LI Business Owners Deliver Letter to State Senator Boyle, Launch Online Petition
Suffolk County Executive Steve Bellone and Nassau County Executive Laura Curran today joined small business owners in Lindenhurst to demand the New York State Senate pass the Internet Fairness and Conformity Act in the 2018-19 State Budget. The Suffolk County Alliance of Chambers — a regional business organization comprised of local chambers of commerce and other business alliances — unveiled an online petition to mobilize support. The Alliance also hand delivered a letter to New York State Senator Phil Boyle (R-Bay Shore) — Chairman of the Senate Committee on Commerce, Economic Development and Small Business — to express its disappointment that this has not been a priority of the New York State Senate.
A copy of the letter can be found here and the petition can be found here.
Suffolk County Executive Steve Bellone said: “It is anti-competitive and anti-Long Island to subsidize a system that is simply unfair to small businesses. Healthy competition only works when everyone is playing by the same rules, and the Senate should support this measure to protect everyone in the marketplace."
Nassau County Executive Laura Curran said: "We need to spur economic development in our downtowns and provide the support to small local businesses on Long Island. We are counting on Albany to support the Internet fairness measure and level the playing field."
The New York State Senate and Assembly released and adopted their respective one-house budget proposals, which is an outline of priorities and critical starting point for state budget negotiations. While the Assembly included the Internet Fairness and Conformity Act, with some modifications, in its one-house proposal, the Senate declined to include the measure in its own. The state budget is due on April 1, 2018.
The Internet Fairness and Conformity Act would ensure New York’s existing sales tax laws are enforced fairly across most sales platforms, regardless of whether it is in a storefront or over the Internet. This proposal would require the online marketplaces — such as eBay, Amazon, Etsy, and Walmart.com — to collect sales taxes on any products sold to a New York residents from sellers located both within and outside of New York State. Currently, these online marketplaces are required to collect sales tax from New York residents only if the seller is located within New York State. Thus, online providers are providing a tax-free marketplace for sellers outside of the state.
Earlier this month, County Executives Bellone and Curran sent a joint letter to New York State Senate Majority Leader John Flanagan and New York State Assembly Speaker Carl Heastie to reiterate that local businesses on Long Island and across the state find themselves at a competitive disadvantage — losing customers and sales revenue to online providers because they are not required to collect sales tax on purchases. As a result, these online sellers can offer their products at least eight percent cheaper.
This proposal is not a new tax and does not increase sales taxes. Rather, this proposal is a modernization to New York State’s current sales tax collection procedures and would allow the State to adapt to the rapidly changing retail Internet economy. In 2016, online marketplaces in the United States transacted over $110 billion worth of purchases, with retail sales on marketplaces having grown in 2016 at nearly a 15 percent annual pace.
The Government Accountability Office issued a report in 2017 that estimates New York State is not collecting between $500 million and $900 million annually due to sales transactions occurring over the Internet. The Internet Fairness and Conformity Act would close a substantial portion of the gap. According to the Office of Governor Andrew M. Cuomo, in the first year of implementation the proposal is projected to generate $318 million — $159 million in revenue for the counties and another $159 million for the State.
Eric Alexander, Director of Vision Long Island and Co-Chair of Long Island Lobby Coalition, said: "The 100 member LI Lobby Coalition made passage of an internet sales tax one of their top economic development issues in order to level the playing field for downtown small business and provide much needed revenue for local services.”
Francesca Carlow, Nassau Council of Chambers of Commerce President, said: “Small businesses have always been the back bone of our economy and The Nassau Council of Chambers of Commerce strongly encourages New York State to impose second party vendors and e-commerce Marketplace suppliers to adhere to the same rules imposed on our local brick and mortar businesses. It is time to Level the Playing Fields.”
Gina Coletti and Bob Fonti, Co-Chairs of the Suffolk County Alliance of Chambers, said: “The Suffolk County Alliance of Chambers represents the many chambers and business groups in Suffolk County. With the emerging technology and the rapid growth in Internet sales, brick and mortar businesses are at a severe disadvantage without parity or a level playing field with online sales. The state and especially the county are missing out on millions of dollars of tax revenue while thousands of small businesses are negatively impacted and struggling to operate successfully in our main streets and downtowns. We are asking County Executive Steve Bellone to continue to fight for small businesses as they are the backbone of our local, regional and state economy.”
Bob Fonti and Rich Bivone, Co-Chairs of the Long Island Business Council, said: "The Long Island economy & small businesses are totally dependent on sales of products & services. The collection of all sales tax helps drive our economy and government for all residents from Montauk to Manhasset. In order for business & government to co-exist in this challenging economy, it is incumbent upon our elected officials to pass this Internet sales tax legislation immediately.”
Stephen Acquario, Executive Director of New York State Association of Counties, said: “E-Commerce has become an acceptable norm across the United States. Governor Cuomo’s 2018 Internet Fairness Conformity Act recognizes this new reality and positions the state to welcome Internet suppliers worldwide. At the same time, the Governor’s Fairness Act is all about supporting New York’s small businesses, starts ups, minority and women-owned businesses, chambers of commerce, business improvement districts, and other retailers that keep our communities vibrant and productive in our Main Streets and shopping malls. We applaud County Executives Bellone and Curran for standing up for the businesses in their communities, and we encourage state lawmakers to do the same by including this Act in the State Budget.”
Ted Potrikus, Retail Council of New York State President and CEO, said: "“We join County Executive Bellone and remind state legislators that this is not a new tax, nor is it a tax on New York small business, nor is it something that will stifle creativity and growth. E-commerce is huge and robust, agile and smart, and well past any claim of fragile infancy that needs a tax shelter to survive another day. We hope the state Legislature will support the stores in their districts and make sure sales tax is applied in a fair and equitable fashion.”