New York Internet Sales Tax Law Upheld

The U.S. Supreme court refuse to take up the New York Internet Sales Tax law thereby leaving in place a New York appelate court ruling that upheld the law in 2010.

In 2008 New York State passed an Internet Sales Tax law that required larger online retailers such as amazon.com and Overstock.com to collect and pay taxes for purchases made by New York residents if those purchases were made through the online retailers’ affiliates in the state.

The current rule implemented throughout the U.S. is that online companies are only required to collect taxes from customers in those states ehere they have a physical presence.  Physical presence means having a warehouse in the state; having a store in the state; having an office in the state; or having a sales representative in the state.

The New York law passed in 2008 required major online retailers to collect and pay Internet sales taxes if one of the conditions below is met.

1.  The online retailer has an agreement with one or more New York residents to refer potential customers to the seller via a website link or otherwise

2.  Compensates the New York resident or residents for directing potential buyers to the seller and

3.  The seller’s cumulative gross receipts from such directed sales to New York customers exceeds $10,000 during the preceeding 12 months

Sources:
New York Internet Sales Tax Law
LexisNexis (NY appelate court ruling)

By Jack River