Amazon.com, LLC v. New York State Department of Taxation & Finance, 81 A.D.3d 183

New York amended Tax Law § 1101(b)(8)(vi) to impose sales tax collection on certain out-of-state sellers that use in-state residents to solicit NY customers via the Internet.
The presumption applies when referrals by in-state representatives generate over $10,000 in NY-sourced gross receipts during the preceding four quarters, and can be rebutted by showing no solicitation occurred in NY during those periods.
DTF issued memoranda clarifying that the presumption rests on solicitation, not passive advertising, and offered a safe harbor requiring certifications from in-state reps.
Amazon and Overstock operate without NY offices or employees, but rely on in-state Associates/affiliates to refer customers; purchases occur through their unconnected out-of-state sites.
The trial court dismissed the complaints as facially unconstitutional on Commerce Clause and due process grounds; on appeal, the Court of Appeals remanded for further proceedings on as-applied challenges, while ruling facial challenges in favor of the State.
The court held the issues were ripe for review given ongoing enforcement intentions and the need for a factual record on in-state solicitation versus mere advertising, but ultimately concluded the statute is facially constitutional and reinstated the complaint for as-applied review.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Commerce Clause facial challenge viability	Amazon argues the statute overreaches by targeting out-of-state sellers.	State contends the nexus requirement is constitutionally satisfied by in-state solicitation.	Facial Commerce Clause challenges fail; statute facially constitutional.
As-applied Commerce Clause challenge viability	Record insufficient to show in-state reps engage in solicitation.	Record supports potential solicitation; need discovery.	Remanded for further discovery on as-applied Commerce Clause grounds.
Due Process as-applied challenge viability	Presumption is irrational and irrebuttable; vague.	Presumption is rational and rebuttable; terms clarified by memoranda.	Remanded for further discovery on as-applied Due Process grounds.
Equal Protection as-applied challenge viability	Amazon treated differently from similar out-of-state advertisers.	Amazon not similarly situated to others; classification rational.	Equal protection claim rejected on the record; no viable as-applied claim.

Moran Towing Corp. v. Urbach, 99 N.Y.2d 443 (N.Y. 2003) (four-prong Moran test for Commerce Clause)
Quill Corp. v. North Dakota, 504 U.S. 298 (U.S. 1992) (physical presence nexus required for tax collection)
National Bellas Hess, Inc. v. Department of Revenue of Illinois, 386 U.S. 753 (U.S. 1967) (mail-order nexus distinction)
Orvis Co. v. Tax Appeals Tribunal of State of New York, 86 N.Y.2d 165 (N.Y. 1995) (presence sufficiency can be through vendor’s activities in-state)
Standard Pressed Steel Co. v. Department of Revenue of Washington, 419 U.S. 560 (U.S. 1975) (agency presence can create nexus)
Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (U.S. 1977) (Four-prong related to substantial nexus and relatedness)
Washington State Grange v. Washington State Republican Party, 552 U.S. 442 (U.S. 2008) (facial challenges to statutes are disfavored)
People v. Leyva, 38 N.Y.2d 160 (N.Y. 1975) (test for validity of presumptions in due process)
Barwick v. Church of St. Paul & St. Andrew, 67 N.Y.2d 510 (N.Y. 1986) (ripeness and exhaustion considerations in pre-enforcement challenges)