Ya think Eliot needs better advisors?

Posted on | February 29, 2008 | 1 Comment

We have a relatively new governor here in New York, a fellow you may have heard of named Eliot Spitzer. He used to be the state’s Attorney General.

Ah … those were the glory days, huh?

(Pause for musical interlude … )

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He is finding that sallying forth to do battle in the courtroom — an occupation where it pays to be confrontational if your goal is to make a name for yourself — is a very different animal from trying to wade through the murky politics of Albany if you want to get anything done.

Here in the Empire State, we’ve been watching him repeatedly shoot himself in the foot early in his first term and we’ve been wondering with some mild curiosity whether he finds it painful.

Presumably, he’ll learn (if he manages to stay in office that long). In the meantime, he has been making a name for himself among online small business owners that probably should not be spoken in polite company.

Our good friend Anita Campbell of Small Business Trends has an article on the subject posted today at the OPEN Forum Blog, so I’m not going to restate what she says there. I’ll just offer a few additional thoughts.

While the proposal is crafted in a way that would appear to satisfy the physical nexus requirement in the Supreme Court Quill decision, there’s still that “unreasonable burden on interstate commerce” test. This one fails that big-time. But, of course, until somebody challenges this proposal in court, we won’t get the benefit of judicial opinion on the subject.

In the interim, what will probably happen in the immediate aftermath will be that online microbusinesses all over the country will stop accepting affiliates located anywhere in New York State. As long as they don’t have any affiliates there, they can sell there to their heart’s content and this tax collection duty won’t fall on them.

While that may solve the problem for those out-of-state microbusinesses, that solution is going to get a lot of online micros in New York really pissed.

And, unlike the people who live in Ohio and California and Hawaii, those folks get to vote here.

That is the sort of thing that might give our Governor pause … assuming somebody near him knows enough about it to point that fact out to him.

We will hope that occurs before the good man shoots himself in the foot yet again.

He needs to stop before he runs out of toes.

[tags]New York, Governor Elliot Spitzer, sales tax, e-commerce, online sales tax, small business, microbusiness[/tags]

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