U.S. Supreme Court Declines to Review New York's Click-Through Nexus Law

Monday, December 9th, 2013

New York

The United States Supreme Court has issued an order denying Amazon.com's petition for review of New York's "click-through" nexus law.

New York, along with several other states, enacted a "click-through" nexus law for sales taxes. When a retailer has nexus with a state, that state can require the retailer to collect sales tax. Under U.S. Supreme Court precedent, a retailer must have physical presence in the state in order to establish nexus. New York's law creates a presumption that a retailer has nexus with New York if in-state residents (1) refer potential customers to that retailer via Internet links or other means, (2) the referrals result in sales of more than $10,000 over a four-quarter period to New York customers, and (3) the in-state resident receives a commission or other consideration. If these criteria are met, New York presumes that the retailer has nexus and must collect sales tax on sales to New York customers. A retailer may rebut this presumption if it can show that it does not have nexus with New York.

Amazon.com and other online retailers challenged this law in court, and New York state courts ruled that the law was constitutional. The U.S. Supreme Court has declined to review the decisions of these lower courts; New York's law will therefore stand. The decision not to review New York's nexus law is likely to embolden other states to enact similar laws that expand the activities that will satisfy the physical presence requirement for sales tax nexus purposes.


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TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

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