Venable’s John F. Cooney on Amazon.com vs. New York State Department of Taxation and Finance
TM: And what are the ramifications for the affiliates?
JC: For the affiliates, they should be keeping information about sales they generate, collecting sales tax information for the people with whom they deal. So there will be implications both from sort of a sales tax collection and payment side and also on the corporate tax side, because they'll be required to report their revenues to the state.
TM: How many other states have passed similar laws?
JC: The first one was the New York state tax statute. Then Rhode Island was second ... it passed that end of June, very early July of 2009. In that situation, because Rhode Island was a small state, Overstock and Amazon simply cut off all their affiliates in Rhode Island. It's a small state, so there probably were only several hundred, but probably less than a thousand people that were adversely affected.
Since then, I think North Carolina has passed a similar statute, and there are [bills] that are being considered at various levels of the states' legislative processes this year. I think Connecticut is probably the state that's closest to adopting a new one. But these bills have been considered by various committees in the state legislatures, typically as part of the budget process. And the budget is one of the last things to be resolved before the legislature adjourns. So there are a lot under consideration, and if new ones are going to pass, they'll probably pass at the end of June, as most state legislatures tend to go out of session [then].
Other states are looking at this [issue] very carefully. ... So if the New York statute ultimately is upheld, I think we'll see legislation like this in many other states. But I think, by and large, the states are tending to hold off because they understand that the constitutionality of this approach is likely to be resolved in the New York litigation. So the [states] that aren't actively moving on it are studying it and monitoring the situation.