Judge Upholds the Amazon Tax
In what some might view as a dark day in e-commerce, a New York Supreme Court judge has dismissed a lawsuit by Amazon.com and Overstock.com over a new law that requires online retailers to collect sales tax. Despite not having a physical presence in the state, the cleverly conceived law taxes any online retailer who has an affiliate marketing program in New York.
At stake is an estimated $73 million for New York this fiscal year. But lawyers representing Amazon and Overstock contend that the law violates the Commerce Clause of the U.S. Constitution and the Due Process Clauses of the Fourteenth Amendment to the Constitution, and were seeking an permanent injunction prohibiting New York from enforcing the law. Judge Bransten didn't see it the same way.
"The neutral statute simply obligates out-of-state sellers to shoulder their fair share of the tax collection burden when using New Yorkers to earn profit from other New Yorkers," the judge wrote.
Amazon and Overstock are expected to appeal the ruling with the New York State Supreme Court Appellate Division, and failing that, it would then go the New York State Court of Appeals. And yes, being a constitutional issue, this could also end up being heard by the U.S. Supreme Court.

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DrCoolP
January 15, 2009 at 11:07am
I don't understand this at all...If I buy something from Amazon.ca I have to pay my local provincal tax of 8% along with my federal sales tax of 5%. Are you saying in America it is not like this? That online businesses are above taxes similar to when I buy stuff at the flea market from my local chinese retailer?
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zeringue
January 14, 2009 at 5:57pm
This shows how desparate states are to continue to spend money on ever increasing social services even though the state is not bringing in additional funds. Perhaps states need to do what most americans are/should be doing, cut back on spending, start putting additional money in the bank. Cut back on non essential services.
A simple solution for this is a nationwide sales taxes, ditch the IRS and make any purchase include a 15% sales tax. There would not be any deductions, loop holes or exceptions, you buy you pay. even the illegal money would start contributing.
Some small portion 3 percent of the 15% from inet sales goes to the states.
If i was amazon, i would stop selling in new york. Let the people of New York scream at their government.
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habuza
January 14, 2009 at 11:49am
To both of you. The financial future of the United States of Hypocrisy does look bleak, indeed.
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jwalch.hawk
January 14, 2009 at 10:13am
I've gone on this rant before, but what the hell...
I am totally siding with Amazon and Overstock on this one. And it's *not* because I don't think they should have to collect sales tax. In fact, I think they should. HOWEVER, it is NOT the state's (in this case, New York) job to dictate that.
"violates the Commerce Clause of the U.S. Constitution" <--- This. Long story short, this is a FEDERAL issue because these companies are by their nature interstate commerce.
Summary:
States trying to impose sales tax on e-commerce: Sit down and STFU.
Feds: Get off your collective asses and legislate something fair that EVERY STATE will be subject to.
Mmmk? Great.
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DePat
January 14, 2009 at 10:06am
It is just a matter of time. With all the states in the red, the
economy in a free fall, and the Federal government on the ropes, we the
people will be taxed to the poor house.All the states, counties and municipalities had no problems making their financial forecasts
based on incredibly stupid assumptions (e.g house prices will never go
down and the likes). Now that they received a good "beating" they want to
tax us as if we did not suffer the same financial hardships.I agreed that the major retailers have to paid their share of taxes and
help collect them, but not for the reasons advanced by the state of new
york. I want them to collect the taxes because that will give a chance to
the local vendors to compete. Aside from that, the states have to learn
how to become lean and shed the "FAT" and "Financial leaziness" they have
accumulated during the years of financial stupidity.
DePat

















