The Supreme Court on Monday declined to hear a case involving a New York law requiring online retailers to collect state taxes on their goods, even if they have no physical presence in the state. The lawsuit involved Amazon and Overstock.com, both of which challenged a 2008 state law and a subsequent ruling back in March that decided that both companies had a sufficient presence in New York through affiliates, and therefore, had to collect taxes on purchases.
In that ruling, according to The New York Times:
The chief judge added that it might be time to reconsider the basic rule that states may not collect taxes from out-of-state companies without some physical presence in the state, a principle recognized by the United States Supreme Court in its 1992 decision in Quill Corp. v. North Dakota.
The decision of the Supreme Court to not rule on the case means that New York's efforts to bring online and brick-and-mortar retailers in line with each other remain in tact. Amazon currently collects sales tax in 16 states. According to The Washington Post, "The National Conference of State Legislatures estimated in 2012 that states lost $23 billion in uncollected taxes of all types and that about half were from online sales."
A spokesperson for the company said that the refusal from the Supreme Court "leaves in place a state law that will significantly and unduly burden interstate commerce, [and] provides a road map for other jurisdictions to inflict similar burdens on interstate commerce."
While states have individual sales taxes, there is no national sales tax, although Congress has been working on legislation allowing states to enforce collection on online retailers. The Senate approved one such bill back in May, but it didn't make it through the House.
This article is from the archive of our partner The Wire.
We want to hear what you think about this article. Submit a letter to the editor or write to firstname.lastname@example.org.