Andre Yoskowitz
5 Nov 2010 16:13
A New York appeals court has reinstated Amazon and Overstock's lawsuit over sales taxes today, a decision that could shape Internet taxation for the future.
Both e-tailers have claimed that New York's state law forcing them to collect sales tax on online purchases is unconstitutional.
The original complaint had been dismissed.
Amazon and Overstock filed their cases in early 2008 and have been collecting taxes on purchases from NY buyers ever since while they await the case.
Cnet got a quote from Brad Maione of the New York State Department of Taxation and Finance: "We're pleased with the decision in light of the fact that the court found that the statute is indeed constitutional. We are confident that we will prevail in the end."
The case should have its merits as a 1992 Supreme Court ruling found that retailers cannot be forced to collect sales tax from customers in other states if they don't have an office in that state. Neither e-tailer has an office in New York state.
New York, when it enacted the law, said online retailers that do not collect taxes have an unfair advantage over brick-and-mortar companies that have to, by law, collect taxes.