Amazon Must Continue To Collect Sales Taxes, N.Y. Court Rules - InformationWeek
IoT
IoT
Mobile // Mobile Applications
News
1/14/2009
02:40 PM
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
Comments
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
Digital Transformation Myths & Truths
Transformation is on every IT organization's to-do list, but effectively transforming IT means a major shift in technology as well as business models and culture. In this IT Trend Report, we examine some of the misconceptions of digital transformation and look at steps you can take to succeed technically and culturally.
Video
Slideshows
Twitter Feed
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.
Flash Poll