NY State Income Tax Expansion Mostly Survives Legal Attack (2)

A New York regulation imposing additional income tax obligations on out-of-state online retailers mostly survived a challenge by a trade group for internet sellers.

The rule “does not broadly tax any and all internet sales, but rather identifies, for taxation purposes, those internet activities that establish substantial nexus between an out-of-state seller and New York,” Justice James H. Ferreira of the New York Supreme Court for Albany County wrote Monday.

But retroactive application of the challenged regulations violates taxpayers’ due process, the judge said, noting that the final rule published in 2023 was made retroactive to 2015.

The American Catalog ...