Amazon sues New York over tax law

Amazon.com (NASDAQ: AMZN) is deeply committed to offering you a huge selection of products, lightning fast service and amazing prices -- and it is willing to sue the state of New York to protect those prices.

On April 23rd, a new law took effect in New York, requiring out of state online retailers to collect sales from New York customers if they have representatives in New York soliciting sales for the company. Amazon's international affiliate marketing program means that it must collect the taxes, according to the state.

Amazon is punching back, suing New York and New York taxation and finance commissioner, Robert Megna, and Governor David Paterson, asking the state Supreme Court to overturn the law as unconstitutional. Amazon also says the law is "impermissibly vague and overbroad."

The Wall Street Journal reports (subscription required) that Amazon is defending itself on the grounds that it has no physical presence or employees based in New York, although the company's jobs site would seem to suggest otherwise. The distinction may be that the shipping facilities located in New York do constitute efforts to solicit business for the company.

In any case, New York politicians are not going to win any fans trying to make it one of the five states charging sales tax on Amazon.com transactions. The others are Kansas, Kentucky, North Dakota and Washington.