Earlier this morning, Suffolk County Executive Bellone appeared on The Capitol Pressroom with Susan Arbetter to discuss the Internet Fairness and Conformity Act and this year’s State Budget.
Susan: Among County Executives and people who run localities absolutely. The Senate Republicans not so much. They just consider it another tax as does the Business Council of New York State who has issued a memorandum of opposition. So how do you respond to that?
Bellone: Well, I think that there’s a lot of politics involved here. People are worried about elections and the Business Council may have other interests that they are looking to protect here. The reality is that the politics should not be involved here and we should just allow common sense to rule. That is to say, we need to make sure that those brick and mortar store, you know those main street businesses, they are paying property taxes every day to support the services we need; our police, our firefighters, our libraries, our public services. They also have to collect the legal sale tax. Why should big internet companies like Amazon and others be exempt from what we require our main street businesses to do?
Susan: So NYSAC, not surprisingly, agrees with you. They say online retailers have a competitive advantage because they don’t charge this sales tax that local retailers have to charge. Local retailers do have to pay property taxes, but these online retailers don’t use services, they don’t have to pay taxes for fire, garbage, fixing potholes. So why should they have to pay an extra tax?
Bellone: We don’t view this as an extra tax, this is just the existing tax. They have been exempted for so long, and this loophole has existed for so long because back when the internet was developing people didn’t want to do anything to stifle it, and certainly this is actually a way to incentivize its growth. But Susan honestly, I don’t know how anyone can plausibly argue at this point, Amazon is expanding everywhere in the world.
Susan: $700 billion dollars.
CE: $700 billion dollars, exactly. They are threatening brick and mortar store everywhere, so for someone to argue that somehow we need to continue to protect Amazon, I think is absolutely absurd. We should be thinking about protecting those main street businesses.
Susan: Alright. There is another argument here that is a little bit different. Why not wait for the Supreme Court to determine whether such a tax is legal? They are hearing arguments in South Dakota v. Wayfair on April 17, with a decision presumably to follow in June. Why not just wait for the decision?
CE: Well, we don’t know what the Supreme Court is going to do, but quite frankly, when does New York State wait to do what the right thing is? When do we wait to protect our small business owners who are the backbone of our economy? Quite frankly, the retail environment is just changing so rapidly and we are seeing stores go out of business and we are seeing these changes happen at a break neck pace. We don’t have time to delay here. This has been long overdue, we’ve waited too long on this already Susan.
Susan: The Governor has put it in the budget three years, his executive budget three years in a row and it has failed three years. It looks like it is going to go down this year too. There is another argument that the cost will ultimately be born by consumers because Amazon and their third party companies like Wayfair that they do business with are just going to pass that cost down to consumers.
CE: I guarantee that overwhelmingly, the people who are coming in to those downtown businesses when they are walking through the downtown and shopping at their local merchant, and they’re potentially finding things that are cheaper on the internet, they are not thinking about the sales tax, they are not making the choice based on that. I guarantee you that those individuals up and down the line, if you told them that this is harming the local merchant that gives back to the community and supports local organizations and pays local property taxes that keep your residential property taxes down, when they hear that and understand that, overwhelmingly, they will support making sure companies like Amazon are not allowed to continue to benefit from this loophole.
Susan: We have a lot of different things going on here. AIM aid has been flat for, if it’s flat this year, which it looks like it’s going to be, that will be ten years. You got the property tax, this could really help. Do you feel like the municipalities and county governments have been squeezed?
CE: There’s no doubt. County governments are in the middle. It is one of the places that can definitely be squeezed and this is an example of something where it’s just common sense. This is an existing tax, this is not a new tax, this is just making sure that big companies aren’t exempted from it, that we close this loophole in a way that not only allows us to continue to provide the critical services that we need, but is also going to protect importantly our small businesses.
Susan: Any comment Steve Bellone about the possibility of Municipal Shared Services being made permanent, that initiative by the Governor?
CE: I applaud the Governor. I was a supporter of the Shared Services initiative from the start. It was great for Suffolk County. We were able to bring all of the various governments together and have really built that cooperative platform that we think is going to be beneficial for taxpayers moving forward, so we are really happy to see the governors shared services initiative is becoming permanent and we are taking advantage of it in Suffolk County.