SALT LAKE CITY, May 15 /PRNewswire-FirstCall/ -- Overstock.com, Inc.
(Nasdaq: OSTK) announced today that it has notified its more than 3,400 New
York-based affiliate advertisers that as of June 1, 2008 they can no longer
provide advertising for Overstock.com until either New York changes its
controversial new internet consumer tax law or the courts say the law is
unenforceable. On June 1, the controversial new law will require internet
retailers to turn off their New York-based ad partners or collect an up to
9.5% sales tax from all New York internet customers.
"We love New York," said Patrick Byrne, Overstock.com's chairman and chief
executive officer, "but New York's new tax law required us to choose between
New York customers and New York ad businesses. In the end, we chose our
customers. The governor and legislature of New York should understand that a
tax is a price that a government charges for a service, and when the price of
anything is raised, people (including us) buy less of it."
Ironically, at the very moment most tax payers across the country are
getting their IRS stimulus rebate checks, the controversial New York law
threatens to impose an up to 9.5% sales tax on New Yorker's internet
purchases, including those resulting from cashing those checks.
Some e-tailers are signing up for the new tax by announcing that they will
keep their ad structure as is and collect the tax. To its credit, Amazon.com
is challenging the law in New York state court.
"We think the New York law makes no sense at all," said David Chidester,
Overstock.com's senior vice president of finance. "We have worked to assure
that Overstock.com has as small a tax footprint as possible because of the
benefits it provides to our customers. We have no taxable connection to New
York that is recognizable under constitutional principals laid down by U.S.
Supreme Court decisions, and we will keep that status, even if it means having
to say goodbye to some long time New York business connections."
About Overstock.com
Overstock.com, Inc. is an online retailer offering brand-name merchandise
at discount prices. The company offers its customers an opportunity to shop
for bargains conveniently, while offering its suppliers an alternative
inventory distribution channel. Overstock.com, headquartered in Salt Lake
City, is a publicly traded company listed on the NASDAQ Global Market System
and can be found online at http://www.overstock.com.
Overstock.com(R) is a registered trademark of Overstock.com, Inc. All
other trademarks are the property of their respective owners.
This press release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements include, but
are not limited to, statements regarding a change in the new New York tax law
and the company's tax nexus to New York. Our Form 10-K for the year ended
December 31, 2007, our subsequent quarterly reports on Form 10-Q, or any
amendments thereto, and our other subsequent filings with the Securities and
Exchange Commission identify important factors that could cause our actual
results to differ materially from those contained in our projections,
estimates or forward-looking statements.
SOURCE Overstock.com, Inc.
