New York Asks Overstock.com to Consolidate Suit With Amazon

June 18, 2008

Last week, New York State asked Overstock.com to consolidate its lawsuit challenging the state's Internet Sales Tax provision with an earlier suit filed by Amazon.com. The case, which will be heard in New York Supreme Court, is slated to begin on Monday, July 7.

On April 25, Amazon charged that New York's Internet Sales Tax provision violates the Commerce Clause of the U.S. Constitution since it "imposes tax-collection obligations on out-of-state entities such as Amazon who have no substantial nexus with New York." At the time, a spokesperson for Amazon.com noted simply that the retailer would comply with the Internet Sales Tax provision to "obey the law." On June 1, the retailer began collecting sales tax on orders made by New York State residents.

In a suit filed in early June, Overstock.com is asking for an injunction and for the court to declare the Internet Sales Tax provision unconstitutional, according to The Albany Business Review. In contrast to Amazon, however, Overstock decided to drop its 3,400 New York-based affiliates rather than begin collecting sales tax on June 1. According to the Business Review, Overstock will most likely agree to consolidate its lawsuit with Amazon's legal challenge.

In the meantime, the American Booksellers Association continues to urge booksellers in the 44 other states with sales tax to write, fax, or e-mail their governors about this important issue. To make this communication easier, ABA has prepared a template letter that can be adapted and sent. The association asks businesses that contact their governors to send a copy of the letter to ABA Public Policy Liaison David Grogan at dave@bookweb.org.

Additionally, last month ABA COO Oren Teicher e-mailed the booksellers in the 21 states with the largest projected budget deficits as reported by the National Conference of State Legislators, to ask that anyone with connections to a state legislator arrange a meeting with the legislator regarding e-fairness.

"We will provide you with the necessary briefing, materials, and information -- and, in some cases, might be able to participate in the meeting with you," Teicher wrote. "It is imperative that we maintain our momentum and keep the pressure on." ABA is also in the process of preparing state-specific material to assist booksellers, available upon request.

Booksellers who have a legislator in mind, or who would like to discuss this issue further, are asked to contact Grogan at (800) 637-0037, ext. 6662, or via e-mail at dave@bookweb.org. ABA staff can help walk interested booksellers through the process of setting up a legislative meeting and answer any questions about the association's Campaign for E-Fairness.

Topics: News - Bookselling, Sales Tax Initiative, Internet Commerce,