Ruling requiring sales tax collection by online retailers will stand

New York Times News ServiceDecember 3, 2013 

WASHINGTON -- The U.S. Supreme Court on Monday let stand a ruling from New York's highest court requiring Internet retailers to collect sales taxes even if they have no physical presence in the state.

As is their custom, the justices gave no reasons for their decision not to hear the case, which involved Amazon.com, the online giant, and a smaller competitor, Overstock.com. The two companies

challenged a 2008 state law that required online companies to collect sales taxes on purchases made by New York residents.

Brick-and-mortar companies often complain that they are put at a competitive disadvantage when they are required to collect sales taxes and online companies are not.

For now, Amazon has been making some state-by-state accommodations. It has struck deals in several states to build warehouses in exchange for agreeing to collect taxes. According to its website, Amazon collects taxes in 16 states.

It does not collect taxes in Florida, but that is expected to change when Amazon builds a pair of massive "fulfillment" centers along the Interstate 4 corridor, including one just north of the Manatee-Hillsborough border.

In March, the New York Court of Appeals ruled that the companies had a sufficient presence in the state because of affiliated independent sites that linked to the retailers in return for a commission. "The bottom line," Chief Judge Jonathan Lippman wrote for the majority, "is that if a vendor is paying New York residents to actively solicit business in this state, there is no reason why that vendor should not shoulder the appropriate tax burden."

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.

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