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Originally Posted by elemenoP
Actually Phogg's earlier response ("I bet on Amazon") might be helping me understand this. It could be that at the time New York enacted their law, they were in a much stronger position financially than California is now. I guess Amazon is betting that if they strong-arm the state of California, then California will back down, since they have big problems right now.
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Actually, what Amazon did is pick New York to fight it out with. Every other state they cancelled affiliates, but in New York's case they instead decided to push the issue into the courts, and they could only do that if they retained the NY affiliates.
This isn't a question of who is right and who is wrong. In fact it is settled law and Amazon is correct. Quill Corp v. North Dakota settled this question way back when, over mail order business.
The company must have a "substantial nexus" in order to come under the jurisdiction of the state to mandate they collect the state's due sales tax. The court ruling left it to Congress to develop a way to create an interstate tax collection regime, which they have consistently failed to do.
The states are getting mighty upset over Congress' failure in this area, and have now resorted to passing laws they know are unconstitutional, and that they know will get overturned, in order to try to force Congress into tackling the issue.
Amazon only needs to fight this in one state, and so there is no reason for them to comply with the law in the other states, since any ruling will end up being applied to all the states when they win. I say when, because I do believe they are right, having taken the time to read the court's ruling in Quill Corp.
To say affiliates create a substantial nexus would be to say that a television station airing a commercial in Alaska, creates a substantial nexus for the Florida based seller who has no other ties to the state.
It's ludicrous and lacks even the most common sense compliance with the terms laid out by the court.