The latest case sidestepped by the justices came from New York, where online giant Amazon.com lost an appeals court ruling requiring it to collect sales taxes through its affiliates in the state, even though it has no physical presence there.
By turning down the case, the justices handed a victory to New York and other states that collect Internet sales taxes, even while legislation to allow such taxation in all states that have sales taxes remains bottled up in Congress.
It was a loss for Amazon.com and another Internet retailer, Overstock.com, which had claimed since 2008 that their businesses only were located in Washington State and Utah, respectively. The sole links to New York retailers were through other web sites, which received commissions based on sales.
New York's Court of Appeals ruled earlier this year that "the Internet tax is constitutional on its face," despite a U.S. Supreme Court decision in 1992 against North Dakota's effort to collect sales taxes from a mail-order business. The New York court reasoned that Amazon and Overstock had a presence in the state through their affiliated web sites.
"The world has changed dramatically in the last two decades, and it may be that the physical presence test is outdated," the state court ruled in a 4-1 decision. "An entity may now have a profound impact upon a foreign jurisdiction solely through its virtual projection via the Internet. That question, however, would be for the United States Supreme Court to consider."
But on Monday, without comment as is customary, the Supreme Court refused to consider that broader question. That leaves the issue of Internet sales taxes up to the states -- and Congress -- at least for now.
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