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.
Links:
[1] http://www.maximumpc.com/user/paul_lilly
[2] http://i.gizmodo.com/5130866/amazons-sales-tax-lawsuit-in-ny-state-court-gets-dismissed
[3] http://www.channelregister.co.uk/2008/02/13/amazon_badmouths_new_york_net_tax_plan/
[4] http://www.channelregister.co.uk/2009/01/12/amazon_tax_ruling/
[5] http://www.maximumpc.com/article/news/newegg_reverses_decision_collect_new_york_sales_tax
[6] http://www.maximumpc.com/article/news/online_shoppers_beware_internet_might_not_always_be_a_tax_haven
[7] http://www.maximumpc.com/article/news/should_irs_tax_virtual_economies
[8] http://www.maximumpc.com/tags/business
[9] http://www.maximumpc.com/tags/new_york
[10] http://www.maximumpc.com/articles/news
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