The Paradoxes of Oklahoma’s Amazon Statute: Weak Duties, Expansive Coverage, Often Superfluous, Constitutionally Infirm
Edward A. Zelinsky
Yeshiva University - Benjamin N. Cardozo School of Law
State Tax Notes, Forthcoming
Cardozo Legal Studies Research Paper No. 315
Oklahoma’s new Amazon law is a paradoxical statute. That law imposes a weak enforcement responsibility, namely, the obligation to post notices on websites, catalogs and invoices of consumers’ obligation to pay the Oklahoma use tax on internet and mail order purchases of tangible personal property. However, the Oklahoma law paradoxically imposes this tepid notification responsibility aggressively upon a broader class of internet and mail order retailers than is encompassed by New York’s or Colorado’s Amazon act.
When the Oklahoma law imposes its use tax notification responsibility upon out-of-state sellers with no physical presence in Oklahoma, the law unconstitutionally contravenes the dormant Commerce Clause physical presence nexus test articulated in National Bellas Hess and Quill. When the Oklahoma act constitutionally compels its use tax notification duty upon firms which are physically present in the Sooner State, those firms are already obligated to collect Oklahoma use tax by virtue of the use tax statute’s agency provisions. Hence, the second paradox of the Oklahoma Amazon statute: When it is constitutional, the statute is superfluous; when it is innovative, Oklahoma’s Amazon law is unconstitutional.
The ultimate responsibility for this unsatisfactory situation lies with Congress which has the authority to empower the states to impose sales and use tax collection responsibilities on all remote sellers. Federal legislation in this area is long overdue.
Number of Pages in PDF File: 67
Keywords: sales tax, use tax, mail order sales, remote sales, internet sales, nexus, physical presence, Quill, National Bellas Hess, Complete Auto, Amazon law, dormant Commerce Clause, electronic retailer
Date posted: October 24, 2010