New York recently implemented a law that requires online retailers, even if they have no physical presence in the state, to collect sales tax on shipments to NY residents and businesses. Amazon is challenging the constitutionality of the law, which is known colloquially as the “Amazon Tax.”
NY State is basing its law on the fact that Amazon has many “affiliates” with addresses in New York. Amazon pays affiliates a small commission on sales that originate from a link on the affiliate web site. Does this payment make the affiliate an “agent” of Amazon or is the affiliate being paid for what is, in effect, an ad that worked?