Overstock.com Sues To Stop New York Tax

June 2, 2008 11:33 a.m. EST

New York, NY (AHN) - Internet retailer Overstock.com has sued New York State's new tax law requiring online retailers with a presence in the state collect sales tax from New York residents. Overstock.com becomes the second Internet retailer to balk at the law, which went into effect Sunday.

The lawsuit asks the New York State Supreme Court declare the law unconstitutional and issue an injunction against the tax requirement for Internet retailers.

In a statement, the Utah-based Overstock.com said the state law "attempts to redefine the relationship that Internet retailers have with their New York-based advertising affiliates." In May, Overstock cut ties with New York-based affiliates.

In April, Internet retail giant Amazon.com filed suit against the New York law.

The state said the new taxes could bring in $50 million each year.