As Expected, Amazon Sues New York
Remember the post we wrote about New York taxing online goods that were shipped to the state which got the affectionate name - “The Amazon Tax.” Well, Amazon didn’t take to well to this tax and is now suing New York State claiming this tax is unfair.
Amazon.com is suing New York over a new law that requires out-of-state online companies to collect sales tax from shoppers in New York.
“We are challenging the constitutionality of the recently enacted legislation in New York,” Amazon spokeswoman Patricia Smith said.
Officials estimated the state would gain about $50 million by requiring Internet giants such as Amazon.com to collect state sales tax. New Yorkers are currently on an honor system to report their online spending when they file state tax returns.
The state Legislature and Gov. David Paterson passed the law as part of the 2008-2009 budget. It applies to companies that don’t have a brick-and-mortar presence in New York but have at least one person in the state who works as an online agent — basically someone who links to a Web site and receives commissions for related sales.
The suit argues the change unfairly targets Amazon, is overly broad and vague, and violates the commerce clause of the constitution because it imposes tax-collection obligations on out-of-state entities.
