Developments in the Sales Tax of Electronic Commerce

Recent and Proposed Legislation in New York Sets the Agenda

Corey Rosenthal, JD, and Scott Smith, CPA, and Patrick Duffany, JD, CPA

It should be no surprise that, as a global leader in so many fields, New York State has been a trailblazer for sales tax on electronic commerce. In 2008, the New York legislature expanded its definition of “vendor,” requiring retailers with no physical presence in New York State to collect sales tax (Chapter 57 of the Laws of 2008). This law is commonly referred to as the “Amazon law,” or the “remote seller” or “click-through” nexus provision. Specifically, the law provides that out-of-state retailers soliciting business through a New York representative are required to collect state sales tax in cases where the representative is paid a commission and the vendor's cumulative gross receipts in New York exceeded $10,000 within a one-year period.