NYS Court Dismisses "Amazon Tax" Complaint

The April 2008 law required those online marketers with affiliate programs whose NY-based affiliates generated $10,000 or more in sales to collect and pay sales tax on all New York-bound shipments. Amazon.com had challenged the law as being unconstitutional. In her opinion, Judge Bransten rejected Amazon's arguments that the new law violated the Commerce Clause of the US Constitution, and that it was specifically targeted at Amazon. She also accepted the New York State's argument that the relationship established through an affiliate program agreement is sufficient to establish "nexus" for sales tax purposes under the US Supreme Court's 1992 Quill decision. It is likely that Amazon will appeal this decision but, in the interim, the law and its complicated requirements to certify that tax isn't due will remain in force.

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