NY Sales Tax Law Hits Amazon, Overstock

As reported in Multichannel Merchant, Amazon.com and Overstock.com have lost the first round of their lawsuits challenging the new tax law allowing the state of New York to collect sales taxes from Web retailers with no physical presence in the state.

Overstock.com has already announced it will appeal the decision handed down last Tuesday by New York state supreme court Justice Eileen Bransten, who dismissed the suit in its entirety "for failure to state a cause of action."

The law, signed into effect by New York Gov. David Paterson last April, requires out-of-state online retailers to collect state and local sales taxes when they makes sales to New York state residents. New York is the first state to impose such a law. It is expected that some or all of the 44 other states with sales tax will eventually pass similar laws.

We've covered this a few times before, most recently last May.