Overstock Told That 'Browserwrap' Agreement Is Unenforceable

from the or-is-it? dept

It's still not entirely clear what online agreements are actually enforceable and which aren't. We've seen cases go both ways, with a recent ruling even noting that terms that are a hyperlink away, rather than on the agreement page itself, may be enforceable. But the latest case, involving online retailer Overstock went in the other direction. A court found that Overstock's arbitration requirement was unenforceable, because, as "browserwrap," the user was not adequately notified. Eventually, it seems that someone's going to have to make it clear what sorts of online terms are actually enforceable (if any). Until then, we're going to see a lot more lawsuits like this one.

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California Promises No Sales Tax Due To Affiliates To Keep Amazon/Overstock Affiliates Happy

from the someone's-been-watching dept

In the last few weeks we've seen companies like Amazon drop affiliates in a bunch of different states, due to proposals in cash-strapped state legislatures to force the online retailers to collect sales tax even if there are only affiliates in that state. Apparently, California politicians put forth a similar proposal, and following threats from Overstock to drop its local affiliates, Governor Schwarzenegger has promised that no such bill will pass (thanks Eric Goldman). It seems that the willingness for these online retailers to cut off affiliates (and the anger that creates among those affiliates) caught the attention of at least someone with power in California.

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Amazon's Suit Over NY Sales Tax Gets Tossed Out By Judge

from the closer-to-the-beginning-than-the-end dept

A judge in New York has tossed out suits from Amazon and Overstock which sought to overturn a state law there compelling them to collect sales tax on purchases made by New York internet users. The law was put into place last year and and immediately raised some eyebrows, as federal law allows states to collect local tax on internet purchases only if the retailer has a physical presence in that state. What set New York's law apart was that it considered internet retailers' affiliates, companies or even individuals that sell through the sites, to constitute a physical presence, giving the state the right to collect sales tax. It's highly unlikely that this is the end of the story with this law -- the suits will probably continue in another court, and it may become more common for internet retailers to ditch their New York-based affiliates until things get sorted out, or if the law is upheld. That's one problematic outcome of the law that's harmful to the people of New York; another issue is the dangerous precedent this law could set by allowing every locality to tax a wide array of internet purchases made by their residents, creating a morass of taxing jurisdictions for internet retailers to navigate.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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Overstock Sues New York Over Questionable Tax Collecting Law

from the and-here's-another-one dept

Back in April, New York state signed into law a very questionable bill that effectively made any affiliates of your service (i.e., anyone advertising your services) considered as representing a "local presence" for your company for tax purposes. The law had no reason for existing other than to try to squeeze extra tax money out of online retailers. Amazon quickly sued over the law and Overstock has now followed suit, filing a lawsuit against the tax law. Overstock, of course, has taken its reaction even further, banning all New York affiliates as long as this law is in place. The effective result of the law, then, is that it actually ends up harming residents of the state while not doing very much to actually increase tax revenue. It seems quite likely that this law will get tossed out, as it seems to go entirely against earlier rulings on what constitutes a physical presence in the state.

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Overstock Cuts Off NY Affiliates Over NY's Amazon Sales Tax Law

from the nice-work,-New-York dept

Last month we wrote about how New York was changing a law to try to force Amazon to collect and pay sales tax in New York by defining any affiliate in the state as being an Amazon point of presence. This is a clear perversion of the intention of the law that only requires collecting sales tax if the company has a physical presence in the state. While Amazon is now fighting this law in court, others are taking more drastic measures. E-commerce site Overstock.com has declared that it will no longer allow New York affiliates in order to avoid having the state consider it to have a "physical presence" there. This would be an unintended consequence of such a law. In an effort to get e-commerce providers to cough up more in taxes, not only will Overstock not be paying those taxes, it just made life a lot more difficult for thousands of Overstock affiliates in New York.

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