The Jig Is Up for Amazon; New York Court Dismisses Challenge of State's Internet Sales Tax Provision

In a significant victory for New York's independent retailers, a New York State judge dismissed a lawsuit filed by Amazon.com that challenged the state's Internet Sales Tax provision. The provision, which went into law on June 1, 2008, requires online retailers with certain selling activities in the state, such as Amazon.com, to collect and remit sales tax on sales made in New York State. A similar lawsuit by Overstock was also dismissed, according to Reuters.

In dismissing Amazon's challenge, Judge Eileen Bransten wrote: "The neutral statute simply obligates out-of-state sellers to shoulder their fair share of the tax-collection burden when using New Yorkers to earn profit from other New Yorkers," as reported by CNN Money. Bransten also noted that Amazon.com had failed to state a claim and that "there is no basis upon which Amazon can prevail," according to CNN Money.

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