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Amazon files suit against N.Y. over tax collection law

May 05, 2008|From Reuters

Amazon.com Inc. has sued the state of New York, challenging a new statute requiring Internet retailers based elsewhere to collect New York sales taxes.

Amazon, the world's largest Internet retailer, said in a complaint filed with the state's Supreme Court that the new law, which was passed by the Legislature in early April, was unconstitutional, vague and overly broad.

Through its "Associates Program," the company pays unaffiliated website operators around the country a commission if they advertise Amazon on their sites. Those ads often enable consumers to click through from the advertiser's website to Amazon.com.

The new law presumes that this amounts to solicitation of business in the state, a claim Amazon denies. Amazon has no "substantial" physical presence in the state, and independent advertisers are not authorized to act as Amazon's agents, according to the company's complaint.

Furthermore, Amazon claims the lawsuit unfairly singles out the company.

Seattle-based Amazon wants the law to be declared invalid and to be awarded costs of the legal proceedings.

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