Supreme Court Won't Review N.Y. Sales-Tax Law for Online Retailers

By
Brent Kendall
Updated Dec. 2, 2013 4:36 p.m. ET

WASHINGTON—The U.S. Supreme Court declined to intervene in the long-running battle over whether states can force online retailers to collect sales taxes, leaving consumers in many states to enjoy tax-free Internet shopping while others must pay up when they buy goods on sites like Amazon.com Inc. AMZN -0.34% .

The high court on Monday turned down a constitutional challenge by Amazon and Overstock.com Inc. OSTK -3.39% to a 2008 New York law aimed at collecting sales taxes on online purchases by state residents, an issue that has pitted brick-and-mortar retailers against online companies as Internet shopping has surged.

New York's law, upheld by the state's highest court, was among the first to target collection of sales taxes from out-of-state sellers and has been duplicated by at least a dozen other states, Overstock said. Amazon, the nation's leading online retailer, and Overstock argued in court papers that New York's approach imposes tax-collection requirements that stunt growth in online commerce.

The Supreme Court's avoidance of the dispute comes as the prospect for a national online sales-tax bill dimmed in Congress. The Senate earlier this year approved legislation to make it easier for states to collect online sales taxes. But the effort has since languished in the House amid criticism from tax opponents and resistance from some players in the online retail industry.

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