N.Y. State vs. Amazon.com

amazonDOTcom.jpgAdmittedly, I’ve been slow getting around to this post. Late January, and the first week of February, was pretty busy. However, I’ve been carrying around the aging bit of newsprint since January 14th. The story seemed significant and…well…maybe better late than never. The state of New York won the first round in court against on-line giant Amazon.com over a new law requiring out-of-state online companies to collect state sales tax from shoppers in the state of New York.

A state judge in Manhattan ruled that Amazon had no basis for the legal action. The law requires companies that have at least one person who works in the state, linking to a website and collecting commissions, to pay state taxes. For more details, see the original Associated Press story.

It is anticipated that there will be a substantial benefit to the State of New York. Officials estimated that there would be a $50 million tax gain over the next two years.

For many local businesspeople, the case represents an even larger victory. Booksellers in New York have long protested the inequity of the system. According to the Associated Press, Oren Teicher of the American Booksellers Association argues that, “The state of New York was subsidizing sales on Amazon to the degree of 8 percent”.

Advocates of Shopping Locally would add that, unlike local businesses, Amazon does not generate local jobs, invest in the local community, or stimulate the local economy.


  1. Jerry Bilek said:

    This is a very tricky issue. I can’t believe more states have not gone after uncollected sales tax. Our own school district allows scholastic to sell books in the public schools tax free. the NY case may force the Federal Gov’t. to take up this is issue on a national basis.

    February 9, 2009
  2. Jerry Bilek said:

    I wish I understood tax law, just read this on bookweb.org:

    Minnesota. If passed, S.B. 282 and H.F. 401 would “tax some Internet sales” by defining “solicitor” as a person — whether this person is an independent contractor or other rep — who solicits business for the retailer in the state, as reported by CCH TaxNews. A retailer would be presumed to have a solicitor in Minnesota if the retailer entered into an agreement with a Minnesota resident who referred potential customers to the retailer via Internet link or other means, TaxNews explained. The legislation applies to those out-of-state retailers whose gross receipts from affiliate sales to customers in Minnesota equaled at least $10,000 in a specified 12-month period, TaxNews noted.

    S.B. 282 was introduced by Minnesota Sen. Thomas Bakk (D-06), chair, Senate Taxes Committee. H.F. 401 was cosponsored and introduced by Reps. Ann Lenczewski (D-40B), chair, House Taxes Committee, and Loren Solberg (D-03B), member, Taxes Committee.

    full story:

    February 16, 2009