Supremes Won't Hear Appeal of N.Y. Online Tax Law

It just got more likely that Congress will have to resolve the issue of online sale taxation now that the Supreme Court has declined to hear an appeal related to New York state tax law making online retailers responsible for collecting taxes on good sold to New York residents.

The Supreme Court Monday, without explanation, declined to hear Amazon's appeal of a New York appeals court decision upholding state tax law that there is, as Amazon put it in its petition to the court, an "effectively irrebuttable evidentiary presumption that out-of-state Internet retailers that have no physical presence in the State—such as Petitioners—are in-state 'vendors' and therefore must collect New York sales and use taxes on all of their sales to New York-ers."

The Supreme Court decision also moots a similar appeal by

Amazon had argued that given that New York is the third largest economy in the country, any tax burdens the state imposes on interstate commerce will affect the entire economy.

Amazon had also told the court its review was needed to give legislators "authoritative guidance" on the limits of state taxing authority, but it looks like the Congress will have to go it alone.

Brick and mortar retailers were pleased by the development.

“The decision by the Supreme Court to deny certiorari in the New York case reaffirms that it is up to Congress to close the online sales tax loophole," said Bill Hughes, senior VP of the Retail Industry Leaders Association. "After a strong bipartisan vote in the Senate and positive developments in the House in 2013, this should be the last holiday shopping season that online-only retailers get special tax treatment over their brick and mortar competitors."

Online tax legislation has been a big issue on the Hill recently, with various bills introduced.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.