Amazon cries foul: e-tailer sues New York State over sales tax law

The online giant Amazon.com Inc. has filed a complaint with the Supreme Court of the State of New York saying it is unconstitutional to require e-tailers based outside of New York to collect the state's sales and uses taxes.

Amazon, which is based in Seattle, filed the complaint on Friday against the new law, which has been coined the Amazon tax since it was passed last month. According to Reuters, Amazon described the law as vague and overly broad.

The New York Times said that for decades New York and other states have required residents to pay use taxes on purchases made out of state for which no sales tax was collected. The question is whether the vendors must collect those taxes. At stake is what constitutes a presence in a state.

Amazon pays a commission to unaffiliated Web site operators from California to Connecticut. These sites range from well-known publishers to miniscule blogs. Frequently, the Amazon presence on the sites allows customers to click from the unaffiliated site directly to Amazon.com. If the unaffiliated site is based in New York State and provides a link to the e-tailer, the referral to that site qualifies as a physical presence for Amazon, according to the law. But Amazon says its affiliates are simply sites on which it advertises.

Amazon named New York Governor David Paterson and the commissioner of New York's State Department of Taxation and Finance as defendants in the case. The company is asking for the law to be declared invalid. It also requests being awarded the costs of the legal proceedings.

You may like these other stories...

Amidst the dark clouds hovering over the IRS this year—ranging from the lingering Tea Party scandal to other improprieties to damaging budget cuts—at least there's a ray of sunshine in a new report from the...
SEC, Big Four Chinese affiliates make progress in talks over audit documentsMichael Rapoport of the Wall Street Journal reported that the US Securities and Exchange Commission (SEC) and the Chinese affiliates of the Big Four...
Koskinen warns filing season could be most complicated yetImplementation of the Foreign Account Tax Compliance Act and the Affordable Care Act, combined with a tight budget and the possibility of Congress passing a late...

Already a member? log in here.

Upcoming CPE Webinars

Oct 30Many Excel users have a love-hate relationship with workbook links.
Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.
Nov 12This webcast presents basic principles of revenue recognition, including new ASU 2014-09 for the contract method. Also, CPAs in industries who want a refresher on revenue accounting standards will benefit.
Nov 18In this session Excel expert David Ringstrom, CPA tackles what to do when bad things happen to good spreadsheets.