Amazon Argues that State Tax Law Is Unconstitutional

July 9, 2009

The Internet retail giant, Amazon.com is being forced to cut its ties with several states, including Rhode Island and North Carolina to sidestep some of their new state sales tax policies. These include charging a tax on those products, which are sold to their residents, if the Internet retailer has third-party agreements with in-state businesses.

Amazon has a program, which allows Web site owners to earn fees if they post ads on their Web sites for Amazon. These are seen as the third parties. A spokesperson for Amazon said, “The new law places an unconstitutional burden on interstate commerce.” She also said that it was unfair for a state to require a seller without a physical presence in the state to collect sales tax.

California is currently considering a similar law, but Amazon is lobbying against the change.