New York's "Amazon Tax" called "unconstitutional" by retailer

By Jacqui Cheng May 02, 2008

Amazon is fighting back against a newly-enacted New York state law that requires the online retailer to collect sales tax for the state of New York even though it has no physical presence there. In the complaint filed late last week, Amazon says the law is too broad and calls it unconstitutional because legislators specifically targeted Amazon when crafting the statute. The tax law in question is part of a new state budget signed by New York Governor David Paterson just last week. Previously, New York (like most states) only required online retailers to collect sales tax from customers if they have a physical presence in the state where the customer lives. This is because the states are limited in their ability to collect sales tax from retailers that are based out-of-state, although customers are technically required to keep track of their out-of-state purchases and own up to them to the IRS at tax time.

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