The Channel Register is reporting that the New York Supreme Court (lowest level) threw out a lawsuit brought by Amazon.com and Overstock.com, challenging New York State’s new law, requiring that they start charging sales tax to their New York Customers. Here’s how they explain the new law:
…New York enacted a new tax law called the Commission-Agent Provision, which requires out-of-state retailers to collect and remit sales and use taxes if they have a commission agreement with an in-state resident based on the referral of customers (provided that resident earns more than $10,000 in revenues from New Yorkers).
A state cannot collect taxes and enforce that right against a company or person unless that person has “substantial contacts” with that state. That’s why, until recently, out-of-state, web or phone based sellers didn’t have to collect sales tax from customers in states other than the one in which they are based. But that all changes for New Yorker’s with the new law. Amazon will probably appeal and since this involves constitutional issues, this could very well evenetually go up to the Supreme Court. Hopefully they’ll appeal so we can at least get a few more years of sales-tax-free Amazon purchases!
HT: Sui Generis – Picture courtesy of Town of Frisco, CO
