Amazon Sues NY Over Questionable Tax Collecting Law

from the time-to-prevent-a-mess dept

Recently, Tim highlighted that NY state, in a desperate move to squeeze more tax revenue out of Amazon.com changed the law to require Amazon to collect and pay NY state sales tax on goods shipped to New York. Federal law only requires that companies that have a physical presence in a state collect the sales tax. Amazon doesn’t have a physical presence in New York, so New York redefined “physical presence” to include anyone who’s a part of an affiliate program. Of course, Amazon affiliates are little more than advertisers of Amazon’s goods. As Tim noted, this is effectively saying that any company may suddenly be forced to collect taxes if they just advertise on a website based in a certain state.

In response, Amazon has wasted no time in suing New York State, claiming that the law is unconstitutional, noting that it’s “overly broad and vague,” while also noting that it’s clearly designed to squeeze extra taxes out of one specific company: Amazon.com. It probably doesn’t help NY state’s defense to hear that state officials even referred to the law as “the Amazon tax.”

Filed Under: ,
Companies: amazon

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Amazon Sues NY Over Questionable Tax Collecting Law”

Subscribe: RSS Leave a comment
25 Comments
Anonymous Coward says:

Re: amicus curiae brief

New York higher ups have gone crazy! Raising prices on everything! Now they want to tax companys that is not in New York. I dont see why one would have to pay NEW YORK STATE TAX if they are not a company in NY. AMAZON I HOPE YOU WIN AND NEW YORK IS FORCED TO GIVE BACK ALL THE MONEYS THE WRONGFULLY CHARGE CUSTOMERS!

Lives in New York says:

Re: Re: Re: Amazon Tax

Theres two tiers of the legislative branch. One is the State legislature and the other is the Federal legislature. State senators and representatives set state wide laws and rules, where as federal ones set federal laws and rules. The person you quoted didnt differentiate between the two. Senator Clinton is a federal senator.

thane says:

Hold on a minute...

If the RESELLER AND BUYER are in NY then Amazon SHOULD collect the sales tax and pass it on to the RESELLER to pass it on to the state. If I buy a used book from a reseller in NY and I LIVE IN NY – I would expect to pay NY sales tax just like I would if I bought it from their own (non Amazon) fronted store.

I know this is a headache for Amazon but not that big of one.

That said – the NY law IS overly broad.

sonofdot says:

Re: Hold on a minute...

That would be almost correct, if your fictional reseller were acting as an agent of Amazon, as the reseller could then be construed as a physical presence. However, that’s not the case — the reseller is not an agent of Amazon, therefore Amazon has no physical presence in the state and is thus not required to collect sales tax. The buyer might be required to pay use tax, in lieu of sales tax.

sonofdot says:

Re: Re: Hold on a minute...

The reseller collected the tax, not Amazon, although Amazon may have collected the sales tax on behalf of the reseller. The reseller is in NY, you’re in NY, the reseller is obligated to collect and remit sales tax. In this case, Amazon would remit the taxes collected to the reseller, who would then be responsible for remitting the taxes to the state. This situation is not the same as what the state of NY is attempting by targeting Amazon.

bug-a-boo says:

Amazon.com Tax

I hope that Amazon.com wins. NY needs to spend more time on where they are wasting tax dollars vs. squeezing more out of others.

Do you really think that Hillary has time to sabatoge her campaign with that bill? Maybe you should look up who created and who are the bill backers before you start pointing fingers at Hillary. And No, I am not a Hillary supporter, I just don’t like it when people say things based upon a pure guess and need to blame someone they don’t like. Of course, this will make you upset that I said this because nobody likes being wrong.

Anonymous Coward says:

Re: Amazon.com Tax

What’s really funny about that comment that you responded to was that if Hillary had actually introduced and gotten passed a bill that forced Amazon to pay sales taxes, it would be constitutional because she’s in the U.S. Senate and the federal government has the ability to force companies to pay sales tax in other states. Commerce clause and all that.

Michael G. says:

Its coming...

Here’s how its going to finally go. Someone in Congress is going to pass a legation to finally tax the internet commerce trade, and anyone out there not expecting it is a complete jerk, and what he or she is going to do its start with a really small tax on internet commerce, a penny or two. He/She is going to plead their case about all the taxes ‘All Us Americans Are Losing’ and the public, as stupid as they can be sometimes, is going to go for it. Hell, Its only a penny. Within a few years that penny is going to pass 10% of the price of the product you buy on the internet and president Clinton is going to realize how much money she now has stocked away and she starts another war, with…ahh…China because they now control the free market and a Clinton can’t have that. Whew, where did that come from…lol.

Joe (profile) says:

Amazon owes the country something

Targeted taxes suck; they’re unfair and inefficient. But the problem is that chambers of commerce and other business lobbyists fight the FAIR taxes, too. Eventually something comes down the pipe that affects one company or industry more than another because it’s politically effective (but still exceedingly difficult) to split the business lobby.

I’d like to see the businesses that oppose illogical taxes on business talk about what they ARE willing to pay to be socially responsible members of society. We don’t hear too much of that.

Tom in Oregon City says:

Now, now, be a good little CopperTop....

Look, NY just wants the money. Most states that have sales taxes have companion “Use Tax” laws, that require NY residents to pay the same tax rate on purchases made out of state, and brought into their home state. And nobody pays them. So NY wants the big national e-tailers to pay the tax, because the residents are rebelling.

Remember “The Matrix”, where everybody is just an energy supply for the machines? Well, that’s what taxes are: energy for the “machine”. And the state doesn’t like it when their little CopperTops don’t give them all the money they want.

Think NY is bad? Imagine the shock of tourists in Maine, where the state has begun to levy sales taxes on tourists who bring high-value vehicles — boats, RVs, planes — into the state, and stay longer than 20 days. Now even roaming CopperTops aren’t safe, and they can’t even vote to oust the legislature that’s hammering them.

Time for a Tea Party, I think. I don’t like being thought of as a power supply for a government that doesn’t listen very well.

Bastiat was right: people love to use the power of government to take from others, who can’t defend themselves. And that’s just sick and twisted.

Online Entreprenur (user link) says:

Boycott NY... NOW

I am boycotting sales of all items to all residents of New York.

On my shopping cart is a notice that no one for New York state will be served, the contact information for David Patterson via email and phone.

You don’t have to buy anything, but you can see my example at http://www.PortableAirConditioners.us – you don’t have to buy anything, just drop something in the shopping cart.

This piece of political vandalism has got to be stopped. Yes, this will hurt my business. It will hurt every online business if no one fights back.

I challenge every online business to step up and boycott. This will NOT GO AWAY BY ITSELF, and other states WILL follow.

Anonymous Coward says:

I sell books on half.com and have noticed many orders from the same person over a period of time. I have discovered they are amazon resellers. Since I`m in wisconsin and I may ship a book to california, this reseller is in georgia. Who pays the tax? I`m not paying the CA state tax but the guy in GA better be. If he`s not, the last thing I need is for California trying to collect state tax from me. Any comments?

dave in ny says:

Its coming... by Michael G. on May 2nd, 2008 @ 2:41pm

You guys are all missing the big picture here.I already have my income taxed by the fed and state alike.Which is a double tax on my income to begin with(unconstitutional) if I remember my constitution correctly.Any other additional tax beyond those to should be automatically put to death because of it.These bureacrats should be given a forced lesson as to what is written in that piece of paper they swore to uphold upon entering office.

Leave a Reply to dave in ny Cancel reply

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Ctrl-Alt-Speech

A weekly news podcast from
Mike Masnick & Ben Whitelaw

Subscribe now to Ctrl-Alt-Speech »
Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...
Loading...