Determining the liability of internet retailers to collect sales taxes

Document Type


Publication Date


Journal / Book Title

International Journal of Technology Policy and Law


This paper discusses the current issues on internet commerce sales tax. The main issue is whether an internet retailer is responsible for collecting sales tax. An out-of-state seller is not required to collect sales tax from buyers who reside in states in which there is no minimum connection between the seller and the state. This paper summaries judiciary decisions in the past and points out that physical presence was the principle to satisfy the requirement of minimum connection. And, in 2008 the New York State legislature enacted the so called ‘Amazon tax’ that requires an internet retailer to collect sales tax from buyers in New York if the retailer has affiliates in New York that put the retailer’s website link on the affiliates’ websites so that shoppers could order merchandise from the retailer by using that link. In this case, the minimum connection was extended from the physical presence of the retailer to include the physical presence of the retailer’s affiliates. Moreover, in February 2013, a bill (the Marketplace Fairness Act of 2013) was introduced in both houses of the Congress that would give states the option to require the collection of sales and use taxes already owed under state law by out-of-state businesses, rather than rely on consumers to remit those taxes to the states.



Journal ISSN / Book ISBN

1742-4259 (online) 1742-4240 (print)

Published Citation

Poon, Wing W., James G.S. Yang, and Beixin Lin. “Determining the Liability of Internet Retailers to Collect Sales Taxes.” International Journal of Technology Policy and Law 1, no. 4 (January 1, 2014): 387.