050208amazonbot.jpgLast week Governor Paterson signed off on a new tax law requiring out-of-state retailers to collect sales tax from consumers in New York State. Like other states, New York requires residents to pay tax on out-of-state purchases for which sales tax wasn’t collected. The big argument is over who’s responsible for collecting; the new law puts that onus vendors like Amazon, which is now fighting the bill in State Supreme Court.

What’s interesting is that the new bill hinges on some legal legerdemain that would make John Yoo proud: The law claims that Amazon does have a presence in New York because of all the websites with in-state address that link to Amazon for a referral fee – links like this! And lawmakers say it doesn’t even matter that there are hundreds of thousands of these affiliates (there are); even if there was only one, Amazon would have to collect taxes on transactions from all New Yorkers.

Amazon insists the law is “overly broad and vague,” because how are they supposed to figure out which of their myriad affiliates are in New York? The company equates the referral fees to ads, and goes further to call it unconstitutional because, by specifically targeting Amazon when they drafted the bill, lawmakers violated the “equal protection clause.”