Amazon at odds with N.Y. over Internet sales tax law

Amazon, the world's largest online retailer sued the state of New York, claiming its new law requiring out of state retailers to collect New York sales tax was unconstitutional.

Amazon filed the complaint with the New York state Supreme Court on April 25, claiming the law was vague and overly broad. It also told the court that it believes the law unfairly singles the company out.

It is looking for the law to be overturned, as well as for the state to pay any legal costs incurred if it is decided in Amazon's favor.

At issue is a program known as "Amazon Associates," which pays Web site owners a commission for purchases made that were referred through that site. Since some of these companies may be based in New York, the state sees it as a solicitation of business in the state under this law.

In arguing its case against the new policies, Amazon told the court that it has no substantial physical presence in the state. In addition, Web sites doing business with the retailer under the affiliate program do not have the power to act as an agent of Amazon.

The company had no comment on the suit other than to confirm its existence.