Mobile // Mobile Applications
News
1/14/2009
02:40 PM
Connect Directly
RSS
E-Mail
50%
50%

Amazon Must Continue To Collect Sales Taxes, N.Y. Court Rules

The Amazon case differs from typical online sales tax regulation, which requires companies to levy sales taxes in only the states in which they have physical operations.

Amazon.com and other online retailers should collect New York sales taxes on goods sold over the Internet to residents of the state, a state Supreme Court justice has ruled, in a decision that could reopen the broader issue of sales taxes on the Internet.

In a decision by Justice Eileen Bransten made public Tuesday, Amazon was told it's required to collect sales taxes on shipments into New York. Amazon has been collecting the taxes anyway even as it challenged the tax issue in court.

It wasn't immediately clear whether the decision would broadly apply to other Internet retailers. Another online retailer, Overstock.com, said it's challenging the leveling of similar sales taxes, and it could take some time before a ruling on the Overstock litigation can be made.

The Amazon case differs from typical online sales tax regulation, which requires companies to levy sales taxes in only the states in which they have nexus -- a physical operation. Amazon has no operations in New York, but the judge in effect ruled that because Amazon has affiliates and partners in the state, the company should pay sales taxes on items sold over the Internet.

"Amazon should not be permitted to escape tax collecting indirectly," Bransten wrote in her decision, "through use of an incentivized New York sales force to generate revenue, when it would not be able to achieve tax avoidance directly through use of New York employees engaged in the very same activities."

New York state had argued that Amazon indeed had affiliates -- Internet site operators who earned commissions for sending customers to the online auction company.

Comment  | 
Print  | 
More Insights
Building A Mobile Business Mindset
Building A Mobile Business Mindset
Among 688 respondents, 46% have deployed mobile apps, with an additional 24% planning to in the next year. Soon all apps will look like mobile apps – and it's past time for those with no plans to get cracking.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest September 23, 2014
Intrigued by the concept of a converged infrastructure but worry you lack the expertise to DIY? Dell, HP, IBM, VMware, and other vendors want to help.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.