Online Sales Tax – An “Amazon Laws” Reading List

“Also significant for Amazon and other e-retailers falling within Section 6023 is the potential boost the legislation may give to the affiliate marketing programs of their California brick-and-mortar competitors. Historically, some of these brick-and-mortar retailers have been among the most vocal advocates for affiliate nexus laws…”

Lawyers and law firms on JD Supra are following closely the so-called “Amazon Laws” implemented by state tax authorities to generate additional tax revenues. Here’s a roundup of recent commentary and analysis on the thorny issue of internet sales tax:

Goodbye, California? Will California’s New ‘Amazon Tax’ Send E-Retailers Packing? (Reed Smith):

“This law-also known as California’s affiliate nexus law-will require out-of-state retailers who: (1) engage in business in California through the use of affiliates; and (2)have cumulative sales of greater than $500,000 during a preceding 12-month period, to collect and remit taxes on sales made within California. In incorporating this legislation into its new budget, California becomes the latest in a growing list of states – Texas, Colorado, Connecticut, Arkansas, Illinois, Hawaii, Rhode Island, North Carolina, and New York-to enact a law making online retailers, who have no physical presence of their own in these states, subject to sales and/or use tax obligations as a result of the activities of their in-state affiliates.” Read more»

MoFo State & Local Tax Insights (Morrison & Foerster LLP): 

“Since 2008, when New York passed its so-called “Amazon Law,” virtually every significant Internet retailer has wrestled with this question.  Unfortunately, despite widely held expectations that the ongoing Amazon.com litigation might soon provide an answer to that question, the New York Supreme Court, Appellate Division’s recent decision failed to provide any clear answer, at least when considered against typical real-world Internet arrangements.” Read more»

Online Retailers And Vendors Advertising On Illinois-Based Websites Subject To Tax, Beginning July 1, 2011 (Duane Morris LLP):

“Persons and entities that create this tax-collection nexus for a retailer are those businesses that “for a commission or other consideration based upon the sale of tangible personal property by the retailer, directly or indirectly refers potential customers to the retailer by a link on the person’s Internet website.” This is a type of “Amazon law” being litigated in various states.” Read more»

Internet Affiliates Fight Back in Court Against Illinois Retail Tax (Ifrah Law – Strategic Defense in Federal Investigations):

“An organization that represents online affiliates filed suit in federal court this month challenging the constitutionality of a new Illinois law targeted at collecting sales tax from Web retailers. Internet retail giant Amazon.com has threatened to cut off its marketing affiliates in Illinois in an effort to avoid paying the tax, and other companies are threatening similar action. We have previously examined the potential effects on affiliates of this type of state tax.” Read more»

California Enacts New Registration Requirements For Out-Of-State Retailers (Manatt, Phelps & Phillips, LLP):

“By way of background, California’s sales tax generally applies to the sale of merchandise in the state. California’s use tax, on the other hand, is generally imposed on the storage, use, or other consumption of merchandise within the state (in instances where sales tax is not applicable). With certain exceptions, any ‘retailer engaged in business in [the] state’ that makes a sale subject to California use tax is required to register with the California State Board of Equalization and collect and remit any use taxes due.” Read more»

Illinois, Michigan and California State Tax Advisory (Duane Morris LLP):

“Recent developments in state tax laws include sales tax changes in Illinois and California, including the latter’s “Amazon law,” as well as replacement of the business tax in Michigan.” Read more»

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