Overstock.com, Inc., Appellant, v New York State Department of Taxation and Finance et al., Respondents. Amazon.com, LLC, et al., Appellants, v New York State Department of Taxation and Finance et al., Respondents., 20 N.Y.3d 586

Summary

Plaintiffs argued that the Internet tax was unconstitutional on its face because it violated the Commerce Clause by subjecting online retailers, without a physical presence in the State, to New York sales and compensating use taxes. They also maintained that the Internet tax violated the Due Process Clause by creating an irrational, irrebuttable presumption of solicitation of business within the State. The appellate court held that the Internet tax was constitutional on its face, finding that the statute plainly satisfied the substantial nexus requirement. Active, in-state solicitation that produced a significant amount of revenue qualified as demonstrably more than a slightest presence. The bottom line was that if a vendor was paying New York residents to actively solicit business in the State, there was no reason why that vendor should not shoulder the appropriate tax burden. The appellate court would not strain to invalidate the statute where plaintiffs had not met their burden of ...