The Ottumwa Courier

AP National

December 3, 2013

Supreme Court won't stop NY's Internet taxation

(Continued)

Web retailers generally have not had to charge sales taxes in states where they lack a store or some other physical presence. But New York and other states say that a retailer has a physical presence when it uses affiliates — people and businesses that refer customers to the retailer's website and collect a commission on sales. These affiliates range from one-person blogs promoting the latest gadgets to companies that run coupon and deal sites.

Amazon and Overstock both use affiliate programs. Amazon has been collecting sales tax in New York, even as it fights the state over a 2008 law that was the first to consider local affiliates enough of an in-state presence to require sales tax collection. Overstock ended its affiliate program in New York in 2008 after the law passed and has ended its affiliate programs in other states that have tried to force it to collect sales taxes.

Without the affiliate programs, companies still can sell in those states but just won't partner with local people and businesses that refer customers to their sites.

Both companies collect sales taxes in some states. For example, Overstock.com collects taxes in Utah, where it is based. Amazon says it collects sales tax in 16 states.

"Today's Supreme Court decision validates New York's efforts to treat both online and brick-and-mortar retailers equally and fairly, by requiring all retailers with a presence in our state to collect sales taxes," said New York Attorney General Eric T. Schneiderman.

But each state has its own rules. While Monday's result settles the issue for New York, legislatures and courts in other states have come to different conclusions — meaning that some Americans will still get state tax-free Internet purchases from certain websites, while others won't simply because of where they live.

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