Friday, May 2, 2008

Amazon Sues New York Over Sales Tax Law

Amazon.com has sued New York State, over a law which forces online retailers to collect sales tax on shipments to the state. Amazon filed the complaint last Friday in the State Supreme Court in Manhattan. The move comes after the approval of a section of the New York State Tax Law which requires Internet retailers -- including those who do not have a physical presence in the state -- to collect taxes on behalf of the state. In particular, the law targets affiliates of Amazon.com and other e-commerce retailers, claiming that a retailer must collect taxes if they use any "in-state entity" to directly or indirectly refer customers to a retailer. The lawsuit (AMAZON.COM LLC and AMAZON SERVICES, LLC. vs. NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE), challenges the constitutionality of N. Y. Tax Law 1101 (b)(8)(vi).