Is New York's Amazon Tax Headed to Supreme Court?
- Aug 26, 2013 | Gail Cole
Update: The Supreme Court refused to hear the case.
It's official. Both Amazon's and Overstock's petitions for writ of certiorari have been filed with the Supreme Court, asking the court to review the New York Court of Appeals' opinion in their battle with the New York State Department of Taxation and Finance over NY's sales tax collection obligation.
The New York Court of Appeals ruled on March 28, 2013, that Overstock and Amazon must collect and remit sales tax, pursuant to New York State's 2008 affiliate tax law. Both Overstock and Amazon challenged the law, alleging it is unconstitutional because it violates the U.S. Constitution's Commerce Clause.
The NY court disagreed, noting in its opinion that the "world has changed dramatically in the last two decades, and it may be that the physical presence test is outdated."
Marketplace Fairness Act of 2013
On May 6, the U.S. Senate approved the Marketplace Fairness Act of 2013 (MFA), federal legislation that would grant states the right to impose sales and use tax collection duties on certain remote retailers, provided the state enacts certain simplification measures. Since that time, MFA has been on the table of Congress. Should it become law, Overstock would no longer have grounds to challenge the New York law.
Both Overstock and Amazon applied to extend the time to file for a petition of writ of certiorari back in June, when it looked like federal lawmakers might move on the MFA. Since that time, the MFA has been gathering dust on the table of Congress, and an imminent decision seems less and less likely. Perhaps as a result of this, Amazon and Overstock are moving forward with their petitions.
A response from the Supreme Court is due for the Overstock writ on September 23, 2013, and for the Amazon writ on September 25, 2013.
Is your business prepared to handle sales tax changes?
Get Free Tax Rate Tables
photo credit: mindgutter via photopin cc
