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U.S. Supreme Court Declines to Review New York Amazon Click-Through Nexus Case

In our April 1, 2013 State and Local Tax blog, we described the impact of New York’s highest court upholding New York’s Internet affiliate nexus requiring the collection of sales tax even when a retailer has no physical nexus itself in New York.  The taxpayers subsequently appealed to the U.S. Supreme Court. 

On December 3, the U.S. Supreme Court denied a request to review the Amazon.com and the Overstock.com challenges to New York’s statutory provisions requiring out-of-state Internet retailers with no physical nexus to collect sales tax.

This decision has now exhausted the appellate options for the New York law.   Thus, “click-through” nexus is now the law of the land, at least in New York.  While other states have adopted laws similar to New York’s, not every state’s affiliate nexus law has been upheld.  Specifically, the Illinois Supreme Court decided in October 2013  that the Illinois affiliate nexus statute was invalid and unenforceable because it was preempted by the Federal Internet Tax Freedom Act.

Gary Bingel's expertise focuses on state and local income taxation, and sales and use tax consulting. He has significant experience serving clients in the manufacturing, retail, pharmaceutical, biotechnology, technology and service industries.

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