Today (January 14, 2009) we’ll be discussing the Constitution and we’ll spend a bit of time on the Commerce Clause, that part of the constitution that allows the federal government power to regulate the economy.
Amazon.com recently sued the state in New York arguing that the Commerce Clause prohibited that state from taxing them:
New York state won a round in court against Amazon.com over a new law requiring out-of-state online companies to collect sales tax from shoppers in New York.
The law applies to companies that don't have offices in New York, but have at least one person in the state who works as an online agent — someone who links to a Web site and receives commissions for related sales.
A state Supreme Court justice in Manhattan ruled the suit should be dismissed, saying Amazon had no basis for legal action.
Patty Smith, an Amazon spokeswoman, declined comment. The company sued last year, challenging the constitutionality of the legislation. It could still appeal.
The suit argued the change unfairly targets Amazon, is overly broad and vague, and violates the commerce clause of the constitution because it imposes tax-collection obligations on out-of-state entities.
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