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Amazon Sales Tax Challenge Fails in Federal Court (Correct)

Oct. 15, 2021, 7:33 PMUpdated: Oct. 19, 2021, 7:19 PM

A federal judge in California has denied a bid by online merchants to stop the state from collecting back sales taxes from sellers that keep their inventory in Amazon fulfillment centers.

U.S. District Judge Morrison C. England Jr. in an Oct. 13 order granted the California Department of Tax and Fee Administration’s motion to dismiss a lawsuit by the Online Merchants Guild, determining that, according to the Tax Injunction Act, such claims should be filed in state courts. The court also dismissed the guild’s request for a preliminary injunction.

“The TIA’s primary purpose is to prevent federal courts from ...

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