Amazon Sues NY State Over New Tax Rule

New York state loves taxes, who knew? Last week, the state put forth a requirement that e-tailers in other parts of the country would have to begin taxing NY-based consumers appropriately. Currently, Amazon does not tax consumers on any of the merchandise, as far as I can tell. I have looked through my previous Amazon receipts, and even being in Canada, I have never been taxed for items there. I didn’t even realize this until now.

Well, consumers are not the only ones upset with this new decision. Amazon has wasted no time in suing the state in order to void the sales tax rule. Whether they will be successful or not is anyone’s guess. One major e-tailer vs. one major city. That’s a tough one to call.

I have to wonder if things are a little different in Canada, though. While Amazon doesn’t charge me taxes, I noticed that another e-tailer based in Canada does charge tax, on par with what I’d have to pay if I walked into a store. They base it off of whatever province you are in, and adjust the sale accordingly. Whether this e-tailer even has to do this, I’m unsure, since Amazon seems to get away without charging any tax at all.

If Amazon fails to succeed at this lawsuit, then it could mean bad things for online shoppers. If New York is successful, there’s nothing stopping other states from joining on in.

The new law is based on a novel definition of what constitutes a presence in the state: It includes any Web site based in the state that earns a referral fee for sending customers to an online retailer. Amazon has hundreds of thousands of affiliates—from big publishers to tiny blogs—that feature links to its products. It says thousands of those have given an address in New York State, although it does not verify the addresses.

Source: New York Times