Amazon Fights NY Over Collecting Sales Tax

The "Amazon Tax," requiring certain online entities to collect state taxes in New York regardless of physical location, has Amazon's lawyers scrambling to arms.

When New York State finally passed its budget last week with a hotly contested law referred to as the “Amazon Tax,”  spectators expected trouble. Not surprisingly, a week later, Amazon is rolling out the legal cannons to fight the law, which forces it to collect sales tax in the state despite having no physical presence there.

According to the New York Times, the state government managed to twist Amazon into its tax structure by classifying affiliates, such as Web sites that make money sending Amazon traffic, as a good enough physical presence to collect tax. Thousands of Amazon’s affiliates have addresses in New York, forcing the company to collect state sales tax on New York sales if it wants to stay legal.

Amazon filed its cased in the State Supreme Court in Manhattan on Friday. The company lawyers will argue in court that affiliates should not count as agents, and that the law is “overly broad and vague.” They will also attempt to use the state’s "Amazon Tax" moniker against it, to show that the law specifically targeted Amazon, violating the Equal Protection Clause of the Constitution.