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Is New York's Amazon Tax Headed to Supreme Court?


 New York's Amazon tax may be on its way to the Supreme Court.

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that the "world has changed dramatically in the last two decades, and it may be that the physical presence test is outdated."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.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.