Cengage Advantage Books: Foundations of the Legal Environment of Business 2nd Edition by Marianne Jennings, Albert Napier, Marianne Jennings

Exercise 13

Amazon.com has now begun collecting sales tax on sales to residents of New York. New York is the first state to pass a law requiring retailers, even those without a physical presence in the state, to collect sales tax from residents of New York. Both Amazon and Overstock.com have filed suit challenging the constitutionality of the New York statute. Amazon has collected taxes only in states where it has a physical presence and uses partners within states for purposes of selling and shipping merchandise. With revenue shortfalls in most states for 2010 and 2011, online sales revenue is an untouched pot of money that state legislators and treasurers would like to get their hands on.
What would be the argument against the constitutionality of the tax? What would be the argument upholding its constitutionality? What is Amazon's standard for determining which states it pays taxes in? Why that standard?