Legal Matters

The New York legislation creates the “presumption” that a remote seller is obligated to collect New York sales/use taxes if it enters into agreements with New York residents for the referral of potential customers through Web site links. The TSB didn’t adopt the most expansive interpretation of this broad statutory language. Instead, it limits the application of the law and makes clear how an out-of-state retailer can rebut the “presumption” and thereby be relieved of use tax collection obligations. The department’s relatively modest approach to enforcement may be part of its effort to defend the constitutionality of this new statute in the face of court challenges filed by Amazon.com and Overstock.com.