Supreme Court Won’t Hear E-tailers' Sales Tax Case

The U.S. Supreme Court has refused to hear a case filed by online retailers Amazon.com and Overstock.com Inc. against New York State’s taxing Internet purchases.

The two e-tailers charged the sales tax law violated the Commerce Clause by imposing tax-collection obligations on out-of-state retailers that have no physical presence in the state. In refusing to consider the argument, the high court let stand a ruling by the New York Court of Appeals that Amazon and Overstock were subject to the sales tax because they had contracts with local affiliates (such as blogs that post links to the companies’ web sites).

The decision is seen, at least for now, as a victory for traditional retailers, which have long pushed for Internet sales tax fairness. But the New York Times reported that retail trade groups are urging Congress to pass clear and binding legislation to settle the tax matter.