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A New York State Supreme Court Justice has dismissed Amazon.com's lawsuit challenging the law that requires some out-of-state online retailers to collect New York sales tax.

New York Justice Eileen Bransten wrote in an order released today "there is no basis upon which Amazon can prevail."

The judge said the New York law does not tax "any and all Internet sales," but only requires businesses to collect state and local sales taxes if the company generates $10,000 or more in revenue via affiliate networks.

"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," the judge wrote.

Amazon had argued that since it does not have a physical presence in the state that it should not be required to collect taxes on shipments going to New York. "Amazon has no physical presence in New York," according to the company's suit. "It does not own, lease, or otherwise occupy any physical property in the state, and none of its employees works or resides in the state."

Amazon had also argued that the New York law is unconstitutional based on a 1992 U.S. Supreme Court ruling that said states are prohibited from requiring out of state retailers to collect tax unless the company had a physical presence in the state.

A similar lawsuit by Overstock.com was also dismissed. Both Amazon and Overstock are expected to appeal the decision.