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Amazon Fights Back Against NY Online Sales Tax

Posted by Soulskill on from the fighting-the-good-enough-fight dept.

The New York Times is reporting on Amazon's lawsuit contesting the recently enacted New York state law which requires online retail outlets to collect sales tax on items sold to the state's residents. Amazon disagrees that it should be required to collect such tax without a physical presence in the state. We discussed the 'Amazon Tax' last month. Quoting: "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. Amazon has hundreds of thousands of affiliates--from big publishers to tiny blogs--that feature links to its products. It says thousands of those have given an address in New York State, although it does not verify the addresses. The state law says that if even one of those affiliates is in New York, Amazon must collect sales tax on everything sold in the state, even if it is not sold through the affiliate."

4 of 254 comments (clear)

  1. I wonder if... by Anonymous Coward · · Score: 4, Interesting

    I wonder if Amazon could just refuse to sell items to people in NY state, and additionally drop all affiliates there (or at least stop accepting new affiliates). I'm sure all those affiliates (bit and small) would make some racket to their state legislators if they were cut off.

    Of course they'd never go that route, I think. It sure would be fun to watch, though. :P

    1. Re:I wonder if... by SpiritualRemains · · Score: 4, Interesting

      I believe the easiest option for Amazon would be to simply drop all affiliates in New York. Refusing to sell to New York is financial suicide for them, but dropping all affiliates wouldn't cause too much grief from the public.

  2. Re:A few thoughts... by kamochan · · Score: 4, Interesting

    And this would scale to global customers, how exactly? Chinese or Swedish or maybe Australian buyers paying average-US-state sales tax on their purchases?

    If something like this (the NY solution, or parent's) gets implemented for real, then online vendors will simply move out of the US to the land of the (tax-)free.

    It's internet commerce. Any solution needs to be globally viable, or it will be doomed to silliness. This is also why it's going to be darn difficult to solve.

  3. Re:A few thoughts... by maxume · · Score: 4, Interesting

    Shipping through customs is going to be a lot worse than most sales taxes.

    --
    Nerd rage is the funniest rage.