New York State legislature recently included a provision in the budget passed in April, which could result in about 50 million dollars coming in from a tax from online retailers, mostly coming from e-tailer Amazon.com. Some opponents say that electronic commerce will be stilted by the tax and that state and local laws are too complex for online retailers to deal with. But others point to smaller online merchants commonly which use services like Yahoo Stores, Paypal, or Google Checkout to process transactions which allow specific tax rules to be set.

Proponents argue that the tax levels the playing field for traditional bricks and mortar stores and that the increased tax revenues for the state would be a reasonable benefit. But taxes are usually only required to be collected from businesses that employ agents or representatives within a state, how exactly does Amazon qualify as a physical presence in the state?