• Litigation Challenging New York's Controversial Nexus Statute Continues
  • November 10, 2010
  • Law Firm: Sutherland Asbill Brennan LLP - Washington Office
  • On November 4, an appellate court held that the New York affiliate nexus law does not violate the Equal Protection Clause and is facially constitutional under the Due Process and Commerce Clauses. However, the court remanded the case to further explore whether the New York law violates the Due Process and Commerce Clauses as applied to the taxpayer.1 As summarized in a previous A Pinch of SALT column, New York amended its tax law in 2008 to impose a sales and use tax collection requirement on out-of-state sellers who engage a New York resident to solicit business through an Internet Web site (New York’s “click-through nexus statute”).2 Amazon.com LLC, its affiliate Amazon Services LLC, and Overstock.com, Inc. (Plaintiffs) filed declaratory judgment actions challenging the law. A lower court dismissed the complaints in their entirety, and the Plaintiffs appealed.