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Amazon sues NY state over tax collections

updated 12:45 am EDT, Fri May 2, 2008

Amazon sues New York State

Amazon has filed for legal action against the State of New York because of a bill that recently passed, requiring online resellers to collect sales tax to New York residents. The New York Times writes that the online commerce giant is suing not out of desire to see taxes abolished from goods bought over the internet, rather that it does not wish to be held liable for collecting taxes, the company feels is the job of state officials.

The dispute stems from the State's definition of a commercial presence, which includes any web site based in another state earning referral fees. Since Amazon has thousands upon thousands of affiliates, with many of them coming from New York itself, the State sees fit that Amazon should do its part.

Amazon feels that the statement is "overly broad and vague", and that it is impossible for the company to determine precisely which of its referrers live in New York, due to the mostly anonymous nature of the internet. In addition, it feels the commissions it collects are just another way of paying for advertising.

by MacNN Staff



  1. chadpengar

    Joined: Dec 1969


    I agree with Amazon

    NY states definition of "presence" is rather broad and probably undefendable.

  1. robttwo

    Joined: Dec 1969


    New Jerk

    NY would tax your balls - if any of the politicians there had any to use as an example.


  1. macjockey

    Joined: Dec 1969


    NY has balls

    I hope other states will watch this lawsuit closely and produce identical legislature when NY wins. Non-taxed Internet sales are killing local and state resources.

  1. localnet

    Joined: Dec 1969



    MJ, When is enough, ENOUGH? How much do states take from us everyday? They tax every damn thing I can think of here in Michigan. It is to the point that businesses and residents are running for other states and countries!

    No, Amazon is correct in their lawsuit. Someone has to stand up to these bloated bureaucracies. Enough is enough.

    And if you feel you are not paying enough in taxes, then you should feel free to write a check to your local municipality or state. I am sure they will gladly accept your donation. Jeez...

  1. Monstermind

    Joined: Dec 1969



    GO AMAZON! That blind pig Paterson has enough money, unless Spitzer spent it all on hookers.

    Buy your stuff from Amazon now - TODAY - before NY state gets its filthy hooks on MORE of our money.

  1. bjojade

    Joined: Dec 1969



    The problem with not having tax on internet sales is it kills local business. If you were to buy an iMac at your local store, you would pay $50-$100 in sales tax on that purchase. If you ordered it online, you don't pay that tax. Many states have rules that say you're supposed to pay that tax when you file your income tax, but very few people do. It's nearly impossible to track and enforce.

    So, what happens is the local stores have a much harder time competing with internet operations because there is no way they can afford to pay that difference. The solution is to have the sellers collect tax based on the state in which the item is shipped to. It only seems logical.

  1. Person Man

    Joined: Dec 1969


    Use taxes

    Many states have use taxes on items bought out of state. They are equal to your state (and county's) sales tax, and they're on your state income tax form.

    I had a friend who got audited, and they went after him for not paying the use tax on items where sales tax wasn't included. This is in Ohio.

    Most states that have use taxes won't make you pay it if you've paid sales tax to another state, though technically if the tax you paid was less than your state's tax you have to pay the difference.

    So you really can't claim that you don't have to pay sales tax on out of state purchases any more. If you have a use tax (=sales tax) and you don't pay it and they find out, you're in big trouble.

    My friend had to pay interest and penalties, and they went back several years after that. It was the only problem he had with his forms.

    Needless to say, I pay my use taxes. As does my friend.

  1. localnet

    Joined: Dec 1969


    The Internet is not...

    The internet is killing local business? How so?

    Here is what is killing small business in Michigan. From my local congressman:

    MBT = Michigan Business Tax

    I talked to a small business owner the other day. He has 5 employees. Unfortunately for him, two of his employees are his married daughters. They are part of the family business. The MBT includes a clause for what is called "attribution". Anyone who works for the business who is part of the family is attributed as the same person for total personal income purposes.

    So, this poor guy, who paid $10,000 in Single Tax liability last year, has to pay $55,000 this year. Why? Because his personal income from the business, combined with his daughters' personal incomes, amounts to more than $180,000! End

    And you clowns want even more TAXES! When will it end!? It is time for government to do like the rest of us and CUT BACK and quit spending OUR MONEY like drunken sailors on liberty!

  1. gskibum3

    Joined: Dec 1969


    The Internet?

    It isn't the internet that's killing local businesses. It's the absurd level of taxes we pay and the correct perception of waste in government. If the local taxes weren't so burdensome and were instead more reasonable, people would much rather run out and buy the product from a local retailer. If taxes were significantly less I'd much rather buy from a local retailer. I find it much better in regard to having defective product handled more efficiently and in regard to helping to support local businesses.

    There's also the strong sense people have that way too much of revenue collected on taxes are wasted. I loved it when the city spent a month repaving the street and installing new sidewalks outside my business, only to return a few months later to dig it al up and install new sewer lines! What efficiency! That is but one minor example of city & state government waste.

    When I do buy from a local business, I try my best to get it from a small locally owned business instead of some c*** national chain. It came as no surprise to me that those clueless dorks known as CompUSA went out of business...

    I just spent $$$$ on a Pioneer Elite plasma TV. I bought it from a local mom & pop home entertainment shop. It paid off in service. The unit had a problem with the tuner, and they exchanged it for a new one without hesitation. Buying that off the internet and having to exchange it would have been a major pain. In this case the tax was an insurance policy in case something was wrong with the unit.

  1. testudo

    Joined: Dec 1969


    Re: the internet is

    The internet is killing local business? How so?

    Here is what is killing small business in Michigan. From my local congressman:

    Did it ever occur to you why the taxes on businesses are rising? Its because items such as sales taxes are decreasing, due mostly to internet sales. Thus, gov't, in its effort to keep the tax revenue stream stable, has to increase taxes on what it can, which tends to either be local businesses or local households.

    The effect is spiralling, as more taxes makes businesses less profitable and thus driving some out of business, which drives people to use more on-line sales to cover the gap, which causes taxes to rise.

    Oh, and I love people who always complain about gov't waste. But are you doing anything about it? Are you active in your local politics? Maybe you should run for Mayor on a reduce taxes/waste platform.

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