A constitutional challenge to a sales tax on Internet purchases
brought by Amazon.com and Overstock.com recently fell short in New
York's highest court. On March 28, the Court of Appeals of New
York in Overstock.com, Inc. v. N.Y. Department of Taxation and
Finance1 upheld the constitutionality of New
York's sales tax on remote sellers whose only connection with
New York is through a New York resident's website.
New York's "Amazon Law" was the first of its kind
when it was enacted in 2008.2 The statute creates a
rebuttable presumption that a seller is soliciting business in New
York if the seller enters into an agreement with a resident of New
York under which the resident, for a commission or other
consideration, directly or indirectly refers potential customers,
whether by link on an Internet website (referred to as
"click-through nexus") or otherwise, to the
seller.3 In interpreting the statute, the New York
Department of Taxation and Finance has provided that
