Amazon.com has filed a lawsuit challenging New York State’s new law forcing online retailers to collect sales tax on shipments to state residents.

Generally, only those companies that have a physical presence — like an office or store — in the state where the purchase is made are required to collect the tax.

The new law is based on a novel definition of what constitutes a presence in the state: It includes any Web site based in the state that earns a referral fee for sending customers to an online retailer.

I hope Amazon wins. If they don't, not only will it encourage more states to copy this law, but it will discourage online companies from having affiliates.

 

Submitted: May 5, 2008    Views: 131    Comments: 2    Likes: 2   


View Article: http://www.nytimes.com/2008/05/02/nyregion/02amazon.html


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Comments Received:

NYer
(Unregistered)

NY's position is not only sound, but makes good business sense as it will encourage employment in state. I believe that they will win.

Posted: May 6, 2008

Sam Cass
Sam_Cass

The main problem with the law is that it classifies an affiliate as a presence in the state. Thus, if Amazon had a NY affiliate, it would be considered to have a presence in NY. Affiliates though are totally independent companies. If I ran a business, I should not be made to pay taxes based on the business partnerships I have.

Posted: May 7, 2008



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