Amazon.com Sues Over New Online Sales Tax

Amazon.com is hitting back at New York over a new law requiring online retailers to collect sales taxes from customers residing in that state.’

In a complaint filed on April 25, Amazon asked the New York State Supreme Court to declare the recently passed law “invalid, illegal, and unconstitutional.”

New York has long required vendors to collect taxes from customers in its state if they “solicit business” there, according to Amazon’s complaint. But a few weeks ago, the state passed a new law, as part of its state budget, that expanded the meaning of “solicit” to include any company that pays New York-based entities for “directly or indirectly referring customers” to its retail business, or risk “hefty civil and criminal penalties,” Amazon wrote in its complaint.

That expanded definition clearly implicates Amazon, which says it has hundreds of thousands of independent Web site “affiliates” through its “Associates Program” to whom it pays a commission for linking to products for sale on its Web site.
Amazon in its complaint contended that the statute violates the equal protection clause of the U.S. and New York constitutions because it “intentionally targets” the company, noting that some state officials have even described the new policy as the “Amazon tax.”

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