New York Court Upholds Sales Tax for Online Retailers‏

On March 28, 2013, the New York Court of Appeals ruled in favor of what has been dubbed “Amazon Tax,” joining eight other states that require out-of-state retailers to collect sales tax even when they do not have a physical presence in the state, but do have affiliates in the state. In a combined case, the N.Y. court rejected arguments by Amazon.com and Overstock.com, who sought to overturn a state law requiring retailers to pay taxes if they solicit business in New York through a link to a website. The companies argued that the law violated the Commerce Clause of the U.S. Constitution by subjecting online retailers without a physical presence in the state to sales and compensating use taxes. It violated the Due Process Clause by “creating an irrational, irrebuttable presumption of solicitation of business within the state,” they said.