Amazon.com has sued New York State over a new law that requires Internet businesses that receive referrals from other Web sites in the state to begin taxing purchases by New York customers.

The Seattle-based e-tailer has long done business through other Web sites that carry ads and links referring customers to Amazon. These affiliates, or advertising associates, then get a cut of the purchase made by any customers directed to Amazon from their site. Amazon associates are located all over the country and in some cases in New York. The state argues that the use of affiliates by Amazon establishes a tax nexus in the state similar to having a sales representative based there, but Amazon said it cannot establish for a fact which of its affiliates is actually based in New York.

Amazon argued in the complaint it filed in the New York State Supreme Court that it does not have a physical presence in New York and therefore should not be subject to sales tax. It also claimed that the affiliates are not employees.

"None of the in-state advertisers with whom Amazon has associated has ever been considered an employee, independent contractor, agent or other representative of Amazon under any provision of the tax law," said the complaint.

Amazon argued that the so-called "Amazon tax" is discriminatory and that the company lacks a "substantial nexus" within the state of New York. It said the law violates the Commerce and Due Process Clauses of both the U.S. and New York State Constitutions.

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