"Amazon Tax" Moves Forward in New York

Mac Slocum
January 14, 2009 | Permalink | Comments (1) | Listen

A judge has dismissed lawsuits from Amazon and Overstock.com challenging New York's "Amazon tax," which was enacted last year. From the Associated Press:

The law applies to companies that don't have offices in New York, but have at least one person in the state who works as an online agent -- someone who links to a Web site and receives commissions for related sales.

In this case, "agent" is synonymous with "affiliate." Amazon and other online retailers share a cut of revenue generated by affiliate referrals. If further appeals go against Amazon and, as expected, other states jump on the sales tax bandwagon, affiliate programs of all sorts could take a major hit.

The AP notes that the law applies to "companies that have $10,000 or more in New York sales." There's some confusion around this $10,000 figure -- does it apply to companies that run affiliate programs (e.g. Amazon) and generate $10,000 or more in New York-based sales, or does it refer to affiliates who earn $10,000 through revenue share agreements? According to Law.com, the company that sells the products is held to the $10,000 standard. As such, a company could not skirt the law by cutting off individual New York-based affiliates before they reach $10,000 in referral sales. To avoid collecting New York sales tax altogether, companies would have to limit the combined income from all New York affiliates to less than $10,000.

(Via the Reading 2.0 list)

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1 Comments

Simon St.Laurent said:
January 14, 2009 4:36 PM

You know, they could just collect taxes, instead of pretending that they're some weird new wonder-wizardry that's different from every other retailer.

Once upon a time, Internet (and other) businesses could claim that collecting sales tax was just too hard. That's no longer remotely true.

I don't understand why we're even still talking about this a decade or so after the conversation started.

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