Amazon to collect N.Y. sales tax; Overstock drops out
New York's expansive new online sales-tax requirements are drawing mixed responses from major e-tailers that haven't previously collected such fees in the Empire State.
Despite a pending lawsuit challenging the law's constitutionality, Amazon.com has said on its Web site that it still plans to abide by the law and add sales tax to orders shipped to New York when the mandate kicks in June 1.
But online outlet store Overstock.com wants nothing to do with collecting the new tax, according to reports at the Affiliate Tip blog and The New York Times.
A few weeks ago, New York's governor signed a new law that requires any company that pays New York-based entities for "directly or indirectly referring customers" to its retail business to collect sales taxes from New York-based customers. It's an attempt to get around a 1992 U.S. Supreme Court decision in the Quill v. North Dakota case that says retailers aren't required to collect sales taxes from customers who live in states where the businesses don't have a physical presence.
New York's new law directly implicate Amazon, Overstock, and other companies that operate "affiliate" programs, which, in the e-tailers' cases, means they offer commissions to external Web site owners who link to their products and prompt sales. Amazon has hundreds of thousands of such affiliates, although in its court complaint against New York state, the company said it wasn't sure exactly how many were truly located in New York.
Overstock, for its part, is opting to cut off its 3,400 affiliates in New York, telling the Times that it couldn't afford to deal with collecting sales taxes in the state, although it, like Amazon, believes the new policy is unconstitutional. An e-mail from Overstock's affiliate program manager republished by the blog Affiliate Tip characterized the situation as "temporary."
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by ewalsh69
May 15, 2008 11:35 AM PDT
- O well, Amazon charging tax then Buy.com will get more of my business. Amazon was only marginally less expensive than other online or brick/mortar businesses. It was the free shipping and no tax that made them the best deal. But since this law targets specific companies I will find others who offer free shipping and (no tax). Sorry Amazon, do like Overstock and I may return.
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