by Mike Masnick
Mon, Jun 2nd 2008 12:43am
Back in April, New York state signed into law a very questionable bill that effectively made any affiliates of your service (i.e., anyone advertising your services) considered as representing a "local presence" for your company for tax purposes. The law had no reason for existing other than to try to squeeze extra tax money out of online retailers. Amazon quickly sued over the law and Overstock has now followed suit, filing a lawsuit against the tax law. Overstock, of course, has taken its reaction even further, banning all New York affiliates as long as this law is in place. The effective result of the law, then, is that it actually ends up harming residents of the state while not doing very much to actually increase tax revenue. It seems quite likely that this law will get tossed out, as it seems to go entirely against earlier rulings on what constitutes a physical presence in the state.
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