Tax-free online purchases could be a thing of the past

Amazon Affiliate linkSo you know how you don't have to pay sales tax on stuff you buy online unless you're buying it from a company that has a physical presence in your home state? Yeah, that could all be over soon.

New York Governor Elliot Spitzer has pledged not to raise taxes. But he's got a budget deficit to deal with, so he's trying to find new ways to collect taxes. And his administration believes they've found a loophole in that whole bricks and mortar thing.

Here's how it works. Sure, Amazon doesn't have a warehouse in New York. But lots of New York-based web sites have Amazon affiliate links. And Spitzer argues that effectively makes the New Yorkers who run those websites into Amazon salespeople, thus allowing the state to collect taxes from Amazon.

If Spitzer's plan holds up in court, it could open the floodgates and other states would likely be quick to follow. Either that or Amazon and other online retailers would stop offering affiliate programs. The plan is set to take effect in New York in December. So get your shopping done now.

Update: It looks like Spitzer has dropped this plan. For now.

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