Online retailers battle N.Y. nexus.

Author:Bonner, Paul
 
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Online retailers Amazon.com and Overstock.com sued the New York State Department of Taxation and state officials over the state's new definition of Web sellers required to collect sales and use tax. New York changed the definition of vendors subject to the tax to include those who pay a commission or other consideration to a state resident who directly or indirectly refers in-state customers to the seller, including via Web link. The new law was enacted April 9 and applies to sellers doing more than $10,000 in business a year in the state. Sixteen days later, Amazon sued, followed by Overstock on May 30.

Amazon, the seller of books and other merchandise, allows "associates" who post a link to Amazon's Web site on their own Web sites to receive a percentage of purchases resulting from those "click-throughs." Discount goods seller Overstock, along with other online retailers such as Netflix and physical stores with online channels such as Wal-Mart and Office Depot, maintains a similar arrangement through an independent third party, LinkShare. Both Amazon and Overstock argued in pleadings for declaratory relief...

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