Trade Group Calls Amazon NY Tax Law Unconstitutional

Files brief in support of retailer

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The Performance Marketing Alliance has filed a brief with the New York Supreme Court in support of Amazon.com’s appeal, which argues that the law requiring online retailers to collect use taxes on sales in New York based on their relationship with affiliate marketers is unconstitutional under the Commerce Clause of the U.S. Constitution.

Rebecca Madigan, PMA Director
Rebecca Madigan
PMA Director

The PMA takes issue with the New York law’s classification of affiliates as creating a physical presence in the state for online retailers like Amazon, requiring them to collect use taxes on sales made through advertising displayed on affiliate websites.

Affiliates agree to display ads on their websites for another online retailer. They are paid when users click on those ads and take an action such as registration or make a purchase.

The brief explains affiliates provide a form of Internet-based advertising that is similar to traditional print ads distributed by a catalog retailer, and do not represent a physical presence for an ecommerce merchant in any state.  They have no involvement in the sales and marketing process beyond posting the ad.

"Since its creation, the PMA has spearheaded efforts to persuade state legislatures not to adopt statutes like this discriminatory New York law, which threatens the livelihood of thousands of individuals and small business owners and has the potential to strangle ecommerce with invalid regulation," said PMA director Rebecca Madigan.

Amazon filed its appeal on July 13 in the New York Supreme Court and a response is expected by September 16.


Trade Group Calls Amazon NY Tax Law Unconstitutional
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