Read My Lips, No New Tax Collection Requirements
Amazon.com sued New York state and its taxation department today to contest the constitutionality of a new state law requiring out-of-state Internet retailers to collect New York state taxes. The law, which took effect April 23, requires that out-of-state Web retailers collect sales taxes from customers in the state if the retailers have New York-based representatives soliciting business on their behalf. The state considers Amazon and other retailers to be subject to this law because they have "affiliate" marketing arrangements. Amazon alleges the law violates several aspects of the U.S. Constitution because it is "impermissibly vague and overbroad" in its requirement that Amazon, which has no physical presence or employees based in New York, to collect sales taxes.
