Every transaction
supports old New York

New York State governor Eliot Spitzer has proposed a budget that includes a clause to draw tax revenue from e-commerce transactions, reports The Associated Press.

Spitzer's budget, if approved, would require that online retailers collect tax on items sold to New York State residents. Residents are already asked to report how much they spend online when preparing state taxes.

Amazon is fighting the proposal, which defies precedent at state and federal levels, the company said.

Other states have considered taxing online sales, but none have acted on those feelings.

President Nicolas Sarkozy of France recently proposed a tax on internet and mobile phone service. Economist Taylor Reynolds said the move may be seen as "drawing on new technology to fund old technology" (via International Herald Tribune).

In the case of New York State, Spitzer's budget may be perceived as an attempt to salve bureaucratic inefficiency with the cashflow of a young and promising market.