Amazon, feeling singled out by what New York state officials have dubbed the Amazon Tax has decided to sue the state. According to the New York Times, the state changed the law regarding who has to collect taxes and instead of requiring only retailers with a physical location in the state to pay, now — any company with an affiliate in New York state has to collect them as well.
Amazon is saying their affiliates are not really agents but sites on which Amazon places ads.
The ecommerce giant further states that the law is overly broad and vague and finally that it is targeted at a single company — referring to state officials calling it the Amazon Tax.
I first reported on this tax a few weeks back and it will be very interesting to see how this plays out.
If New York wins, it will benefit many retailers in the state and other states will likely follow suit. None of this of course would be good for any online retailer as one of their main advantages will be taken away.
Kevin Fields
May 2, 2008 at 1:44 pmIf New York is upset that people who buy from Amazon.com are not paying taxes on the items they import, then New York needs to go after the taxpayers who are not paying, not out-of-state businesses who should not have to be held responsible for what others fail to do.
Apparently nobody in the state government has any clue how affiliate sales actually works, and apparently they didn’t bother to consult anybody either to see how this law is simply not only an unfair attack on out-of-state business, but how trivial it will be to evade it.
If, for some reason, Amazon fails to prevail in this lawsuit, what kind of effect do you think it would have if they stopped shipping orders to New York customers? And what if other online retailers followed suit? Considering the amount of retailers within New York City that purchase their goods through Amazon at wholesale prices, I’m sure that the situation would quickly turn ugly. It wouldn’t be much of a win for retailers in the state of New York at all.
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