U.S. Supreme Court Refuses to Hear Amazon on New York Sales Tax


Gavel

The latest in the battle over Internet sales tax: the U.S. Supreme Court denied Amazon’s request for a ruling on New York’s online sales tax law.

Will this change the way online commerce works?

The Empire State and the online retail giant have been trading blows over a 2008 law requiring companies to collect sales tax if they make a certain amount of sales via New York affiliates. When the New York Court of Appeals upheld the law earlier this year, both Amazon and Overstock.com took appeals to the Supreme Court on the grounds that the law was unconstitutional. However, today the Court refused to hear the cases without comment.

The law now stands, for all practical purposes, unless New York decides to change it.

In the past, Internet retailers have generally not had to collect sales tax in a state where they lacked physical presence. Laws like the one passed in New York are changing this, since it gives a sales tax obligation to companies based on affiliate relations rather than physical presence.

It remains to be seen whether or not this trend will continue. Meanwhile, Amazon also supports federal legislation that would grant states the right to require businesses to collect sales tax, regardless of physical presence.

photo credit: StockMonkeys.com via photopin cc

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