Wednesday, November 14, 2007

NY's Taxes Likely to Affect All Authors

If you sell your books through Amazon or some other e-retailer, you’ll want to learn about the memo just issued by New York’s Department of Taxation and Finance. According to yesterday’s Publishers Lunch, it has “effectively killed bookselling "affiliate" relationships for Amazon and any other e-tailers that do not currently have a presence in the state.”

E-tailers don’t have to be based in New York to be subject to this. The tie could be as tentative as an author having a link from his site to Amazon for the purpose of selling his book. As an “associate” of Amazon, the author receives a commission or referral fee for the click through.

The memo gives Internet-based retailers until December 7th to register and begin paying sales tax on all sales of taxable products and services in New York. If they don’t register and comply, they face an assessment of taxes, penalties and interest on all past sales.

The first blog to catch onto this memo was I Can’t Believe It’s Not a Democracy. He was so struck by it that he asked Maud Newton to check into it. Maud has tax experience on the government level. She agreed with “I Can’t Believe It’s Not a Democracy.” You can read her entire post. Here is her conclusion:

… while there will undoubtedly be arguments about what constitutes an agent or representative, and other aspects of the state’s position, I think New York ultimately wins on this.

Does this mean that you, the author, are suddenly going to have to start paying taxes or somehow go back through your records and pay back taxes and penalties? No. New York is going after the e-tailers, not you. But stop and think what this might do to Amazon or any other e-retailer. Then think what it might do to your own book sales.

You can read the memo for yourself. This is something for all authors to keep up with.

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