ALBANY, N.Y. — E-tailing juggernaut Amazon.com has filed suit against the state of New York, challenging a new law that requires it to collect sales taxes on transactions here.
The lawsuit, filed in state Supreme Court in Manhattan April 25, disputes the constitutionality of a statute that presumes that an out-of-state retailer solicits business if any in-state entity is compensated for referring customers to it. Amazon.com pays independent third parties, some of them based here, to advertise it by posting links to Amazon.com on their own Web sites.
New York lawmakers approved the new requirement with the state budget April 9. It is expected to yield $50 million in new taxes this year, and $73 million next year.
Seattle-based Amazon, which is being represented in the case by former New York City deputy mayor Randy Mastro, argues that the new law is overly broad and vague and violates the equal protection clauses of both the state and U.S. constitutions because it intentionally targets Amazon. It argues that Amazon maintains no physical presence in the state and that its independent advertisers are not Amazon representatives or agents.
Attorney General Andrew Cuomo’s office is reviewing the filing and will respond in court, spokesman John Milgrim said Friday.
Already, 18 of the top 20 Internet retailers in the United States are registered and collect sales tax in New York, said Tom Bergin, a spokesman for the state Department of Taxation and Finance.
The statute requires Amazon to register and begin collecting sales tax June 1. The company will comply with the law while it pursues its lawsuit, Amazon spokeswoman Patty Smith said Friday.
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