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Amazon loses a New York court case that has been ongoing for around nine months

New York State Supreme Court Justice Eileen Bransten tossed out Amazon.com's lawsuit challenging the state of New York's right to collect tax from out of state transactions through the retailer.  Amazon reportedly failed to state a proper claim and "there is no basis upon which Amazon can prevail," according to Judge Bransten.

Amazon first filed a complaint in April, claiming the law was unconstitutional and too broad and vague.

The law comes into effect if a company doesn't have an office in New York, but has one or more workers who serve as online agents in New York.  For example, New York residents didn't need to pay taxes on products sold because Amazon doesn't have official operations there -- Washington state shoppers, however, must pay taxes, as the state has a headquarters and warehouses there.

State officials widened how "presence" could be described, as Amazon said advertisers aren't classified as official agents for Amazon.com.  The company hoped to have the law changed and have the state pay for all legal costs.

The popular online retailer also has an Associates Program that helps unaffiliated web site operators get paid when advertising Amazon on their own web sites.  New York law indicates this eventually ends up being solicitation of business while operating in New York.

New York state officials said the new "Amazon tax" closes a "tax loophole" that should have never existed in the first place.  Furthermore, the judge said the New York law was "carefully crafted" and didn't offer a blanket tax on all Internet sales, and didn't unfairly target Amazon.

Even though the lawsuit has been thrown out by lawmakers, Amazon can still appeal the decision.

Amazon spokespeople said the new law unfairly targets Amazon, and the state could generate as much as $50 million through 2011 from the tax.  Taxing goods sold both in-state and shipped in could offer the state a new revenue stream to make up for the state's monetary struggles.

However, booksellers in the state are happy to see Amazon finally get taxed.

"The state of New York was subsidizing sales on Amazon to the degree of 8 percent," American Booksellers Association Oren Teicher chief operating officer told the Associated Press.  "That was unfair.  The government ought not ever be in business of picking favorites among competing businesses."

New York recently unveiled a new entertainment tax that would tax all songs through Apple iTunes, as the state's government faces a massive $15.4 billion deficit. 



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RE: No surprise
By marvdmartian on 1/15/2009 10:20:49 AM , Rating: 4
You seem to be mixing up federal taxes, which are doled out by the federal government to all states for projects (i.e.- PORK) with state taxes (income, sales, property, etc), which stay within that state to provide money to run the state government and services. If NY state stopped collecting taxes, it wouldn't affect by one penny the amount of federal tax dollars sent to "poor red states", which pretty much makes your comment pointless and poorly thought out, doesn't it?

The problem with states that are in financial crisis is likely due more to their drastic overspending and waste, not due to any other state, red or blue. NY state needs to stop spending like there's no tomorrow, tighten their collective belts, stop throwing money into programs and services they cannot afford, and learn to live within their budget.....just like every American is now having to learn to do!


RE: No surprise
By Kary on 1/15/2009 5:50:53 PM , Rating: 2
Mind you I'm from a small town in Mississippi so maybe I miss out on how much waste there can be, but we are having a county budget crisis because no one knew or planned for gas prices to sky rocket.
School buses, police, ... quadruple spending for gas with no room in the budget to cover the extra expense (and there shouldn't have been room in the budget.. room in the budget just means you are over taxing for the services you are providing after all)

just my 2 cents


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