- 3 -Nos. 33 & 34to Amazon, Overstock had an “Affiliates” programthrough whichthird parties would place links for Overstock.comon their ownwebsites.
When a customer clicked on the link, he or she wasimmediately directed to Overstock.com, and if the customercompleted a purchase, the Affiliate received a commission.According to the parties’ Master Agreement, the Affliates wereindependent contractors without the authority to obligate or bindOverstock.In April 2008, the legislature amended the Tax Law toinclude the subdivision at issue here. In connection with thestatutory definition of “vendor,” the Internet tax provides that:“a person making sales of tangible personalproperty or services taxable under thisarticle (‘seller’) shall be presumed to besoliciting business through an independentcontractor or other representative if theseller enters into an agreement with aresident of this state under which theresident, for a commission or otherconsideration, directly or indirectly referspotential customers, whether by a link on aninternet website or otherwise, to the seller,if the cumulative gross receipts fromsalesby the seller to customers in the state whoare referred to the seller by all residentswith this type of an agreement with theseller is in excess of ten thousand dollarsduring the preceding four quarterly periods”(Tax Law § 1101 [b][vi]). The statutory presumption, however,can “be rebutted by proof that the resident with whomthe seller
Overstock suspended its Affiliates program(for those whoprovided a New York address) shortly after the enactment of theInternet tax at issue here.- 3 -